Dive Brief:

• Children’s clothing retailer The Children’s Place appointed Ralph Lauren alum John Szczepanski as its CFO, effective March 31, according to a company filing and press release.
• Szcepanski, who will be joining the company from fellow retailer Vince Holding Company, will succeed interim CFO and Chief Accounting Officer Laura Lentini, who stepped into the interim seat following the departure of finance chief and Chief Operating Officer Sheamus Toal on Dec. 14, according to a company filing with the Securities and Exchange Commission at the time.
• The Secaucus, New Jersey-based retailer also announced it had appointed Kristin Clifford to the role of senior vice president, head of sourcing, and Smeeta Khetarpaul as SVP, head of marketing, according to a Monday press release. Clifford’s role was effective as of Feb. 3, while Khetarpaul’s was effective as of Feb. 24, according to the release. The moves are the latest in a series of executive appointments at the retailer, coming as it looks to boost flagging sales.

Dive Insight:

Szczepanski, who has served as the brand’s finance chief since January of last year, will depart Vince on March 28, with company’s VP and Controller Yuji Okumura to step in as interim CFO following his departure, the retailer announced last week. Prior to Vince, Szczepanski held a variety of financial roles during an 18-year span at Ralph Lauren, including service as its SVP and CFO for global manufacturing & sourcing and global inventory optimization.

As CFO for The Children’s Place, Szczepanski will receive an annual base salary of $525,000, and will also be eligible for an annual cash bonus opportunity of 60% of his base salary, according to the filing. He will also receive a restricted stock award valued at $600,000, as well as a one-time sign-on bonus of $200,000, the company said. 

The finance executive will join a reconstituted leadership team focused on reducing costs and improving profitability, a familiar challenge Szczepanski also fielded as Vince’s CFO. After signing a $76.5 million deal for its intellectual property in 2023, Vince has seen its profit margin and sales slump in the following years — with net sales declined by 4.7% to $80.2 million for the company’s most recent quarter, according to a report by CFO Dive sister publication Retail Dive.

The Children’s Place is looking to increase sales following a bumpy 2024. The retailer, which warned of liquidity concerns last February, saw a change in control after Mithaq Capital SPC became its majority shareholder later that month, which led to both a shift in strategy and across its leadership teams, according to company filings at the time.

Last May, The Children’s Place announced CEO Jane Elfers would be leaving and appointed Muhammad Umair — a board member beginning last February with Mithaq’s change of control and previously a senior advisor with Origin Funding Partners — as interim CEO, according to a company announcement at the time.  

Among other moves, the new majority shareholder has also taken steps to improve the company’s liquidity, and to shift its capital allocation strategy, with a focus on paying down its debt.

“Our priority would be to invest in business growth and use free cash flows to reduce and ultimately eliminate debt over time,” Board Chairman Turki AlRajhi, also the chairman and CEO of Mithaq, wrote in a May 2024 letter to shareholders. “Once TCP is debt-free, we will consider the best use of capital depending on the opportunities at that time.”  

The Children’s Place reported some momentum in its turnaround strategy for its most recent quarter ended Nov. 2, slashing its adjusted selling, general and administrative expenses by $9 million to reach $93.8 million for the quarter — as compared to $102.9 million for the prior year period, the company said. It also saw “significant improvement” in its gross profit margin, which increased by 180 basis points to 35.5%.

However, sales continued to drop, declining 18.8% year-over-year to reach $390.2 for its Q3 2024, according to its earnings results. Its gross profit also slumped to $138.8 million, a $23.8 million decrease YoY.

As of the end of its Q3, The Children’s Place had $5.7 million in cash and cash equivalents, $48.3 million in borrowing availability under its revolving credit facility, and an “additional $40.0 million of availability under the Commitment Letter provided by Mithaq, representing total liquidity of $94.0 million,” according to its earnings results. The retailer noted $362.4 million outstanding on its revolving credit facility.

“While these first steps to improve operating results have been promising, we still believe that we have significant work ahead of us in a highly promotional fourth quarter, as well as future quarters as we continue to rationalize profitability,” Interim CEO Umair said in a statement included in its earnings release.

Children’s Place did not immediately respond to requests for comment.