Children's Place eyes $130 mln in new debt after Saudi family swoop

Children's Place

16/02/2024 19:23

By Abigail Summerville
       Feb 16 (Reuters) - 
    The Children's Place  PLCE.O  said on Friday it had received
an offer for a $130 million loan that could help it stay afloat,
after the ailing U.S. retailer announced earlier this week that 
Saudi Arabia's wealthy AlRajhi family had amassed a 54% stake in
the company in the open market via its investment firm.
    Gordon Brothers Group, a firm that specializes in
liquidating brick-and-mortar retailers, has provided a term
sheet for the loan that is subject to due diligence and other
conditions, The Children's Place said. The company added it
hoped to finalize terms next month. 
    The loan discussions come after Mithaq Capital, the AlRajhi
family's investment firm, crossed into majority ownership of The
Children's Place this week through open-market stock purchases,
triggering a change-of-control provision in the company's prior
$50 million debt package that required it to be refinanced.
    Mithaq did not respond to a request for comment on its
interest in The Children's Place, which has suffered as
consumers turn to online stores and general retailers such as
Target  TGT.N  and Gap  GPS.N  for children's apparel. A
Children's Place spokesman also did not respond to a request for
comment.
    Mithaq swooped in after The Children's Place announced on
Feb. 9 it swung into an operating loss in the fourth quarter of
2023, triggering a 58% drop in its shares. Mithaq snapped up
shares for $17.10 apiece, or less, regulatory filings show. The
shares were hovering around $30 on Friday following news on
Mithaq amassing the stake, giving The Children's Place a market
value of about $350 million.
    On Thursday, The Children's Place said Mithaq intends to
nominate 11 people to the company's board of directors.
    Sheikh Saleh AlRajhi is the founder of AlRajhi Bank, one of
the first and largest Islamic banks in the world.
    The Children's Place sells apparel, accessories and footwear
predominantly at value prices under its proprietary brands The
Children’s Place, Gymboree, Sugar & Jade, and PJ Place. It has
over 500 stores in North America, wholesale marketplaces and
distribution in 16 countries through six international franchise
partners. 
 

 (Reporting by Abigail Summerville in New York; editing by Diane
Craft)
 ((abigail.summerville@thomsonreuters.com;))