The Children’s Place Inc. is working with Berkeley Research Group for operational assistance amid declining sales, according to people familiar with the situation, as it tapped a $40 million facility from a Saudi family office.
The Children’s Place
The specialty retailer revealed last month it borrowed another $25 million from its largest shareholder Mithaq Capital to shore up cash reserves, after drawing $15 million in July. The family office has been providing incremental cash injections in the form of Shariah-compliant unsecured term loans, after acquiring 54% of the chain’s outstanding shares in 2024 when the company was edging toward a restructuring. Shariah-compliant financing is structured to adhere to Islamic finance principles, including its prohibition on conventional interest.
A spokesperson for Berkeley Research Group declined to comment while messages left with representatives for The Children’s Place and Mithaq were not returned.
The Children’s Place, which also owns the Gymboree clothing brand, has been dogged by lower foot traffic and inflationary pressure. The New Jersey-based chain recorded revenue of $241.8 million in the three months that ended Aug. 1, down 18.9% from a year earlier, along with a 16.7% drop in comparable retail sales, according to regulatory filings. The company attributed part of the sales decline to a slower-than-expected transition of its e-commerce business to Salesforce. It is also working to liquidate older inventory through clearance sales.
Despite the weak results, The Children’s Place opened 19 new stores in the quarter, the most in any quarter since 2013, after shuttering hundreds of shops during the pandemic. It lists more than 500 stores in North America and international distribution points in 13 countries. The company said in April it was returning to Saudi Arabia, with plans to open a flagship store in Riyadh this year.
Its shares traded around $2 on Monday, in a steady decline from November when they were above $9. In July, the company replaced its chief executive officer with an interim leader, Asif Seemab, a Mithaq executive on the board of The Children’s Place.
