The Children’s Place will get a $90 million unsecured and subordinated loan from Mithaq Capital SPC, a Saudi Arabia-based venture capital firm that had purchased a majority stake in the company in February 2024. That stock acquisition had automatically put The Children’s Place into default on its existing credit agreements; this new financing will “waive the event of default resulting from the change in control,” according to a company statement.
Since Feb. 29, 2024, the retailer has received a total of $168.6 million in funding from Mithaq, a figure that includes the new $90 million loan. The Children’s Place will use the new financing to repay an existing $50 million term loan, reduce accounts payable balances with vendors and for other general corporate purposes.
“We are pleased to have the continued support of our majority shareholder and to have secured additional funding to address our liquidity needs on significantly more favorable terms in the aggregate,” said Sheamus Toal, COO and CFO of The Children’s Place in a statement.
“We are pleased to demonstrate our continued commitment in decisive, self-explanatory actions,” said Turki S. AlRajhi, Chairman of The Children’s Place and Chairman and CEO of Mithaq in a statement. “The financing agreement is not only in the best interest of all fellow shareholders and better than the alternative options, but also puts The Children’s Place in a stronger financial position.”
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For Q3 2023, which ended Oct. 28, 2023, The Children’s Place generated $480.2 million in sales, a 5.7% decrease compared to the $509.1 million in sales during the same period in 2022. Comparable retail sales dropped 7.3%. The retailer has not yet released official Q4 or FY2023 data.
