The Children's Place(PLCE) - 2025 Q4 - Annual Report

Store Operations - As of February 1, 2025, the company operated a total of 495 stores, a decrease from 523 stores as of February 3, 2024, with 431 stores in the United States, 58 in Canada, and 6 in Puerto Rico[45][46]. E-commerce Strategy - E-commerce sales are a strategic priority, with the company enhancing its online presence through partnerships, including a collaboration with SHEIN announced on October 30, 2024[48]. Financial Performance - The company reported a net sales distribution for Fiscal 2024, with the first quarter accounting for 19.3%, the second quarter 23.1%, the third quarter 28.1%, and the fourth quarter 29.5%[52]. - The operating income for Fiscal 2024 showed a loss of $27,988 thousand in the first quarter, a loss of$21,776 thousand in the second quarter, a profit of $29,258 thousand in the third quarter, and a profit of$6,805 thousand in the fourth quarter[52]. Customer Loyalty - Approximately 85% of sales at the end of Fiscal 2024 were attributed to members of the MyPLACE Rewards loyalty program and private label credit card program[54]. Sourcing and Supply Chain - The company has a diversified sourcing strategy, with Bangladesh and Vietnam accounting for more than 15% of production, sourcing primarily from a network of vendors in Asia and Africa[36]. - The company emphasizes a responsible sourcing program to ensure safe working conditions and compliance with local laws in its supply chain[38][41]. - The company imports a majority of its merchandise from countries including Bangladesh, Vietnam, and China, making it susceptible to changes in foreign trade and currency policies[286]. Distribution and Operations - The company operates a 700,000 square foot distribution center in Alabama, supporting retail, e-commerce, and wholesale operations in the U.S. and Canada[55]. Brand Development - The company launched new brands, including Sugar & Jade in November 2021 and PJ Place in October 2022, targeting specific market segments[53]. Marketing Strategy - The company’s marketing strategy includes a focus on digital channels and partnerships to enhance customer engagement and retention[37][54]. Intellectual Property - The Children's Place acquired certain intellectual property and related assets of Gymboree Group, Inc., including the worldwide rights to the names "Gymboree" and "Crazy 8" during Q1 of fiscal year 2019[57]. Debt and Liabilities - As of February 1, 2025, the company had $245.7 million in borrowings under its ABL Credit Facility, with interest rates tied to the prime rate plus 2.000$108.4 million as of February 6, 2025, with interest charged at SOFR plus 4.000% per annum[280]. - As of February 1, 2025, net liabilities in Canada and Hong Kong amounted to $22.2 million, with a 10$2.2 million[282]. Currency Impact - A 10% change in foreign currency exchange rates could have resulted in a $10.8 million change in net sales and a$14.5 million change in total costs and expenses for Fiscal 2024[285]. - The average translation rate for the Canadian dollar was 0.7252 for the fiscal year ended February 1, 2025, compared to 0.7414 for the previous year[284]. Compliance and Regulations - The company is subject to extensive federal, state, and international laws and regulations affecting product safety and consumer protection, and believes it is in material compliance[58]. Cash Holdings - The company has cash and cash equivalents of $3.7 million held in foreign subsidiaries as of February 1, 2025[283]. Ownership Structure - The Children's Place is classified as a "controlled company" due to Mithaq's ownership of more than 50% of its outstanding shares[64].