Children’s Place has filed for bankruptcy after suffering mounting losses and falling sales, as the parent of its namesake and Gymboree children’s clothing brands seeks a buyer and begins liquidating inventory.
The company and 13 affiliates sought Chapter 11 protection from creditors late on Sunday in the Newark, NJ bankruptcy court. Children’s Place reported assets of $742.3 million and liabilities of $881.3 million as of Aug. 1.
Founded in 1969, Children’s Place said it has more than 500 stores in the United States and Canada, and through franchisees and partners has large presences in Mexico and the Middle East, including in Israel and Saudi Arabia.
Mithaq Capital, a family office for Saudi Arabia’s wealthy Al Rajhi family, holds a 61.1% equity stake in the company according to a court filing. It became majority owner in 2024.
In a court filing, restructuring adviser Lorie Beers said Children’s Place has experienced declining sales and profitability, competitive and promotional pressures, rising costs and significant liquidity strains.
Beers said that prompted the Secaucus, NJ-based company to solicit proposals to sell substantially all its assets, sell the Children’s Place and Gymboree brands, or potentially liquidate. She said Children’s Place has received nine proposals to acquire some or substantially all assets.
Children’s Place lost $31 million in the three months ending August 1. Net sales fell 19% from a year earlier, and sales at stores open at least one year fell 17%. Inventory liquidations began on Nov. 6.
The company said Berkeley Research Group is its financial adviser, Cascadia Capital is its investment banker, and White & Case and Cole Schotz are its law firms for the bankruptcy. Beers is Cascadia’s head of restructuring and special situations.
Mithaq did not immediately respond to requests for comment on Monday.
Children’s Place shares closed Friday at 32.2 cents. They traded down 30% at 22 cents on Monday.
