The Children’s Place filed for Chapter 11 bankruptcy protection in New Jersey and is seeking a court-supervised sale of substantially all its assets, while keeping its stores and e-commerce sites open.
The Secaucus, New Jersey-based retailer said in a company announcement that it filed voluntarily in the U.S. Bankruptcy Court for the District of New Jersey. It is pursuing a sale under Section 363 of the Bankruptcy Code with the goal of continuing the business as a going concern and preserving its brands, The Children’s Place and Gymboree.
The company requested bids by December 9, 2026, and said it expected to complete the court-supervised sale process by the end of December. A sale has not been completed, and the process remains subject to court proceedings. The retailer said it planned a new term loan from its existing secured lenders to fund its restructuring and operations; it did not disclose an amount.
All stores and online sites remain open, the company said. It entered a consulting agreement with a joint venture of GA Group, Tiger Group and SB360 Capital Partners to support ongoing inventory sales, subject to court approval.
First-day motions seek permission to continue employee wages and benefits, maintain certain customer programs, and pay vendors for goods and services supplied after the filing. The company said it anticipated approval at its first-day hearing this week, not that approval had been granted. It is also seeking Canadian recognition of the U.S. proceedings to include its Canadian assets and operations in the sale.
“We remain focused on serving the families who have trusted The Children’s Place for generations,” said Rudy Morando, the company’s co-chief restructuring officer.
Mithaq’s $40 million commitment had been fully drawn
The retailer entered bankruptcy after using the last available advance under a financing commitment from its controlling shareholder, Mithaq Capital SPC. In a September 30 securities filing, The Children’s Place said it received a $25 million term loan on September 24 and that the remaining availability under Mithaq’s $40 million facility was “permanently reduced to zero.”
That followed a $15 million advance on July 1. The September loan was unsecured, subordinated to the retailer’s senior lenders and due April 16, 2031. It carried a rate of one-month SOFR plus 9 percentage points, with monthly payments subject to deferral on written notice. The company said it intended to use the proceeds to repay part of its revolving borrowings, reduce amounts owed to vendors and fund other corporate purposes.
The distinction is important: the filing established that this particular commitment had been exhausted. It did not say that Mithaq or the family behind it had run out of money, or that every possible source of future shareholder financing had ended.
Years of support from a Saudi family office
Mithaq Capital is an affiliate of Mithaq Holding Company, a family office headquartered in Saudi Arabia, according to the retailer’s 2024 financing announcement. The company then described $168.6 million in funding from Mithaq, consisting of a $90 million loan and $78.6 million in interest-free loans.
By August 1, 2026, $111.1 million remained outstanding under the two initial Mithaq term loans, separate from the newer $40 million commitment, the company’s quarterly debt disclosure showed. The September filing also identified overlapping leadership: executive chairman Turki Saleh A. AlRajhi was chairman and chief executive of Mithaq Holding, while the retailer’s then interim chief executive, Muhammad Asif Seemab, was a Mithaq Holding managing director. The company said the September loan had been approved under its related-person transaction policies.
Sales losses put the financing in context
The funding supported a business whose sales and earnings had deteriorated. In its second-quarter results, The Children’s Place reported sales of $241.8 million for the three months ended August 1, down 18.9% from a year earlier. Comparable retail sales in its owned direct-to-consumer business fell 16.7%. Its quarterly net loss widened to $31 million from $5.4 million; the first six months produced an $84.1 million net loss.
Management cited lower customer traffic, lower conversion, a clearance-heavy sales mix and a slower-than-expected move of its e-commerce operations to Salesforce. At August 1, the company reported $7.2 million in cash, $47.5 million in revolving-credit availability and the then-undrawn $25 million Mithaq commitment, for total liquidity of $79.7 million. Those were August balances, not cash available on the bankruptcy filing date.
Sale process did not guarantee every store would survive
The retailer’s Chapter 11 petition, filed November 8 in case 26-22682, estimated consolidated assets and liabilities in the same broad range of $500 million to $1 billion each. Those ranges were estimates in the petition, not a completed valuation or a determination of what creditors would recover.
In its restructuring FAQ, the company said certain store closures would be necessary during Chapter 11, although all locations and e-commerce sites remained open at the time of the announcement. It said the review was ongoing and that confirmed decisions would be communicated as they were made.
The company also said it had to prepare for the possibility that a sale preserving the business could not be achieved. Its inventory-sale agreement provided an alternative if it could not secure a better outcome through the court process, while continuing the business remained its stated goal. New financing to support operations still required court approval.
JBizNews Desk | Secaucus, New Jersey
© JBizNews.com. All rights reserved. Unauthorized reproduction or redistribution is strictly prohibited.
