Kids clothing company Children's Place files for bankruptcy, plans to sell assets
Founded in 1969, Children's Place said it has more than 500 stores in the United States and Canada. The company said its stores and e-commerce sites remain open, and says its in talks with multiple groups about a potential sale of its assets.
The company said its stores and e-commerce sites remain open as it seeks a buyer for its assets
Thomson Reuters
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Children's Place has filed for bankruptcy after suffering mounting losses and falling sales, as the parent of its namesake and Gymboree children's clothing brands seeks a buyer.
The New Jersey-based company filed for Chapter 11 protection from creditors late on Sunday in the Newark bankruptcy court.
Founded in 1969, Children's Place said it has more than 500 stores in the United States and Canada, and through franchisees and partners has large presences in Mexico and the Middle East, including in Israel and Saudi Arabia.
"Today's announcement marks an important step in our efforts to secure the best path forward for The Children's Place," said the company's co-chief restructuring officer Rudy Morando.
"We recognize the significance of this development for our employees, customers, vendors, and other partners, and we are committed to conducting an efficient and transparent sale process."
The company said its stores and e-commerce sites remain open, and if the court approves, it intends to continue its ongoing inventory sales as it begins liquidating inventory.
Children's Place reported assets of $742.3 million US ($1.05 billion Cdn) and liabilities of $881.3 million ($1.2 billion Cdn) as of August 1.
Shoppers walk into The Children's Place at a mall in San Jose, Calif., in July 2009. (Paul Sakuma/The Associated Press)
Mithaq Capital, a family office for Saudi Arabia's wealthy Al Rajhi family, holds a 61.1 per cent equity stake in the company according to a court filing. It became majority owner in 2024.
In a court filing, restructuring adviser Lorie Beers said Children's Place has experienced declining sales and profitability, competitive and promotional pressures, rising costs and significant liquidity strains.
Beers said that prompted the company to solicit proposals to sell its assets, sell the Children's Place and Gymboree brands, or potentially liquidate. She said Children's Place has received nine proposals to acquire some or substantially all assets.
The company is asking that any parties interested in buying its assets submit bids by Dec. 9, and expects to complete the court-supervised sale process by the end of December.
Children's Place lost $31 million US in the three months ending August 1. Net sales fell 19 per cent from a year earlier, and sales at stores open at least one year fell 17 per cent. Inventory liquidations began on November 6.
Mithaq did not immediately respond to requests for comment by Reuters on Monday.
Children's Place shares closed Friday at 32.2 cents. They traded down 42 per cent at 18.6 cents in premarket trading on Monday.
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