Children’s Place receives $48.6 million loan
The Children’s Place has boosted its liquidity.
The struggling children’s apparel retailer said it has received $48.6 million of an interest-free, unsecured and subordinated term loan from its majority shareholder, Saudi investing firm Mithaq. It comes on the heels of a $30 million loan from Mithaq on Feb. 29.
Earlier in February, the company said received notice from Mithaq and another Saudi investing firm, Snowball Compounding Ltd., that they had built a 54% stake in the company and were planning to nominate 11 people for election to the board at the 2024 annual shareholder meeting.
“We are pleased to fulfill our commitment to all the company’s shareholders by providing $78.6 million in funding, which is interest-free, unsecured and subordinated,” said Turki Saleh A. AlRajhi, chairman of the company and chairman and CEO of Mithaq. “We believe that there is a strong alignment of interests between the board and all shareholders that will help put the company on a path to strong future free cash flow generation. We also look forward to the addition of Douglas Edwards to our board as a new independent director, and we are confident that his expertise will be an asset to the company as we seek to optimize the company’s finances and operations."
The retailer said it is still expecting to be able to close a previously announced $130 million term loan this month and is pursuing improved terms with lender Gordon Brothers as well as alternative financing on terms no less favorable. On Feb. 9, the Children’s Place issued a profit warning for its fourth quarter and said it was working with its advisors, lenders and potential lenders to obtain new financing.
The Children’s Place global retail and wholesale network includes more than 500 stores in North America, four e-commerce sites, wholesale marketplaces and distribution in 16 countries through six international franchise partners.
The company designs, contracts to manufacture, and sells apparel, accessories and footwear predominantly at value prices, primarily under its proprietary brands: The Children’s Place, Gymboree, Sugar & Jade and PJ Place.