Children’s apparel retailer Carter’s plans to close at least 200 of its locations — about 25% of its store fleet — by taking advantage of expiring leases and kickout provisions. The announcement was made on an Oct. 23 earnings call by Chairman and CEO Michael Casey, during which he also told analysts that the closures would be approximately 60% complete by the end of next year, and 80% complete by the end of 2022.
The planned closures are located in declining shopping centers and are “less likely to support our focus on high-value omnichannel customers,” Casey said. “Open-air centers provide a better, more convenient experience for same-day pickup and curbside pickup of online purchases,” he added. “We plan to continue opening stores located in more densely populated areas and plan to close stores in more remote and declining centers. We currently plan to open less than 100 co-branded stores over the next five years.” Currently, 85% of Carter’s U.S. stores are located in open-air centers.
Carter’s also announced its Q3 financial results. Net sales decreased $78.2 million, or 8.3%, to $865.1 million, compared to $943.3 million in Q3 of fiscal 2019. U.S. same-store sales declined 3.5%, but were partially offset by ecommerce growth of 17.2%. Ecommerce sales represent the brand’s fastest-growing and highest-margin business.
“We exceeded our sales and earnings goals in the third quarter,” said Casey. “The quarter got off to a strong start with our Fourth of July holiday retail sales up 7%. We saw less robust demand in August during the back-to-school shopping period, with many children beginning their school year at home and learning virtually. We had the strongest level of demand in September, with our Labor Day holiday retail sales up 15%, our best performance in three years.”