Children’s Place Inc. is preparing for a possible bankruptcy filing and evaluating a dual-track process that could result either in a sale of the business or a complete liquidation, Bloomberg reported, citing people familiar with the matter. A court filing could come as early as next week, while existing shareholders are broadly expected to be wiped out under a restructuring plan.
The New Jersey-based retailer, which also operates the Gymboree brand, is considering proposals from an investor consortium and liquidation specialists. The discussions remain ongoing and depend on the valuation of the company’s assets, meaning they may not lead to a completed transaction.
The potential Chapter 11 filing follows a prolonged deterioration in the business, including declining store traffic and a heavy debt burden. In the fiscal second quarter ended August 1, revenue dropped 18.9% year over year to $241.8 million, while comparable retail sales fell 16.7%.
Financial support from majority owner Mithaq Capital has not halted the decline. The Saudi family office, which acquired a 54% controlling stake in 2024, provided $15 million in July and added another $25 million in September through unsecured Shariah-compliant financing.
Berkeley Research Group has been advising on the process as the retailer’s liquidity becomes increasingly limited, according to an earlier Bloomberg report. Investor confidence has also deteriorated sharply: Children’s Place shares have fallen nearly 90% this year to about 45 cents, their lowest level since the company’s 1997 debut.
Sources: Investing.com News.