Photo: Ajay Suresh / Wikimedia Commons (2019 archive)
The Children’s Place, the New Jersey-based children’s apparel retailer, is preparing for a possible bankruptcy filing and considering a sale process that could keep the business running or end in liquidation, Bloomberg reported Monday, citing people familiar with the situation.
A filing could come as soon as next week, but its timing remains fluid, according to the report. The reported preparations are not an announcement that the company has filed for bankruptcy, and liquidation is a possible outcome rather than a settled decision.
Bloomberg said the retailer is weighing bids from an investor consortium and liquidators. The discussions concern the valuation of those bids and may not result in a sale. Existing shareholders are expected to be wiped out in a restructuring, the people told Bloomberg.
The alternatives leave a sharp distinction for employees, customers and investors: a buyer could preserve operations, while a liquidation would involve winding down the business. The report does not establish which path the company will take.
The retailer, which also operates Gymboree, has been contending with falling sales and a heavy debt burden. Investing.com’s account of the report said fiscal second-quarter revenue fell 18.9% to $241.8 million and comparable retail sales declined 16.7% for the quarter ended August 1.
That account also described financing support from majority owner Mithaq Capital, including an additional $25 million in September following $15 million in July. The latest report places the company’s options at the negotiation stage, with the timetable and eventual outcome still uncertain.
JBizNews Desk | New Jersey
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