Children’s Place has declared bankruptcy following significant losses and declining sales, as the parent company of its namesake and Gymboree children’s apparel brands seeks a buyer.
The firm, based in New Jersey, sought Chapter 11 protection from creditors late Sunday in Newark bankruptcy court.
Established in 1969, Children’s Place operates over 500 stores across the United States and Canada, while also maintaining a strong presence in Mexico and the Middle East through franchises and partnerships, including in Israel and Saudi Arabia.
“Today’s announcement represents a crucial step in our efforts to determine the best course for The Children’s Place,” stated Rudy Morando, the company’s co-chief restructuring officer.
“We understand the importance of this situation for our employees, customers, vendors, and other stakeholders, and we are dedicated to carrying out a transparent and efficient sale process.”
The company confirmed that its stores and e-commerce platforms remain operational, and pending court approval, it plans to proceed with ongoing inventory sales as it starts to liquidate its stock.
As of August 1, Children’s Place reported assets totaling $742.3 million US ($1.05 billion Cdn) against liabilities of $881.3 million ($1.2 billion Cdn).
Shoppers enter The Children’s Place at a mall in San Jose, Calif., in July 2009. (Paul Sakuma/The Associated Press)
Mithaq Capital, representing Saudi Arabia’s affluent Al Rajhi family, possesses a 61.1 percent equity interest in the company, according to court documents. It became the majority owner in 2024.
In the court filing, restructuring advisor Lorie Beers indicated that Children’s Place has faced diminishing sales and profitability, competitive pressures, increasing costs, and substantial liquidity challenges.
This situation led the company to seek proposals for the sale of its assets, the Children’s Place and Gymboree brands, or possibly liquidation. Beers noted that Children’s Place has received nine proposals to acquire some or nearly all of its assets.
The company is requesting that any interested parties submit bids for its assets by December 9, and anticipates concluding the court-supervised sale process by the end of December.
Children’s Place reported a loss of $31 million US for the three-month period ending August 1, with net sales dropping 19 percent from the previous year. Additionally, sales from stores open for at least a year decreased by 17 percent. Inventory liquidations commenced on November 6.
Mithaq did not immediately respond to Reuters’ requests for comment on Monday.
Children’s Place shares closed at 32.2 cents on Friday and fell 42 percent to 18.6 cents in premarket trading on Monday.
