—The Children’s Place, Inc. (Nasdaq: PLCE),
an omni-channel children’s specialty portfolio of brands with an
industry-leading digital-first model, today announced that it has
received from its majority shareholder, Mithaq Capital SPC
(“Mithaq”), the second tranche of interest-free, unsecured and
subordinated term loan funding contemplated by the previously
announced Unsecured Promissory Note, dated February 29, 2024,
entered into between Mithaq and the Company, in the amount of $48.6
million (the “Second Mithaq Term Loan”).
As previously announced, Mithaq provided the
initial tranche of $30 million to the Company pursuant to such
Unsecured Promissory Note on February 29, 2024, also in the form of
an interest-free, unsecured and subordinated term loan (the
“Initial Mithaq Term Loan” and together with the Second Mithaq Term
Loan, the “Mithaq Term Loans”).
On March 8, 2024, with the funding of the Second
Mithaq Term Loan, the resignations from the Board of Norman
Matthews, John E. Bachman, John A. Frascotti, Debby Reiner and
Michael Shaffer have become effective and the size of the Board has
been reduced to six. Jane Elfers will continue to serve in her role
as President, CEO and director of the Company. In addition, the new
Board has appointed Douglas Edwards – who served in a number of
different roles with Wells Fargo & Company before his
retirement in 2022, including Executive Vice President and Interim
General Counsel – to serve on the reconstituted Board as an
independent director, with immediate effect upon the completion of
customary lender due diligence required by the previously announced
forbearance agreement entered into by the Company and the other
lenders party thereto.
The Company continues to expect to be in a
position to close the previously announced $130 million term loan
(the “Gordon Brothers Term Loan”) in March 2024, as contemplated by
the non-binding term sheet that the Company entered into with 1903P
Loan Agent, LLC. The Company is also pursuing improved terms with
Gordon Brothers as well as alternative financing on terms no less
favorable in the aggregate to the Company.
Turki Saleh A. AlRajhi, Chairman of the Company
and Chairman and CEO of Mithaq, commented, “We are pleased to
fulfill our commitment to all the Company’s shareholders by
providing $78.6 million in funding, which is interest-free,
unsecured, and subordinated. We believe that there is a strong
alignment of interests between the Board and all shareholders that
will help put the Company on a path to strong future free cash flow
generation. We also look forward to the addition of Douglas Edwards
to our Board as a new independent director, and we are confident
that his expertise will be an asset to the Company as we seek to
optimize the Company’s finances and operations. As custodians of
the Company, with an equity stake representing over 54% of the
Company’s common shares, we look forward to continuing to
communicate with all fellow shareholders as we proceed down the
path of value creation together.”
About The Children’s PlaceThe
Children’s Place is an omni-channel children’s specialty portfolio
of brands with an industry-leading digital-first model. Its global
retail and wholesale network includes four digital storefronts,
more than 500 stores in North America, wholesale marketplaces and
distribution in 16 countries through six international franchise
partners. The Children’s Place is proud to be a women-led Company,
including industry-leading gender diversity in senior management
and throughout all levels of its workforce, and of its commitment
to sustainable business practices that benefit its customers,
associates, investors, suppliers and the communities it serves. The
Children’s Place designs, contracts to manufacture, and sells
fashionable, high-quality apparel, accessories and footwear
predominantly at value prices, primarily under its proprietary
brands: “The Children’s Place”, “Gymboree”, “Sugar & Jade”, and
“PJ Place”. For more information, visit: www.childrensplace.com and
www.gymboree.com, as well as the Company’s social media channels on
Instagram, Facebook, X, formerly known as Twitter, YouTube and
Pinterest.
About MithaqMithaq Capital SPC
is an affiliate of Mithaq Holding Company, a decentralized family
office headquartered in Saudi Arabia with investments in public
equities, private equities, real estate, and income-producing
assets in local and international markets. Mithaq follows a
disciplined value investing approach with margin-of-safety as a
principle. Mithaq is a strategic long-term shareholder with a
history of owning high-quality businesses, supporting first-class
management teams, and championing long-standing partnerships based
primarily on trust. Mithaq is a segregated portfolio company
existing under the laws of the Cayman Islands. For further
information, visit www.mithaqholding.com.
Forward-Looking Statements This
press release contains or may contain forward-looking statements
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, including but not limited
to statements relating to the Mithaq Term Loans and the Gordon
Brothers Term Loan. Forward-looking statements typically are
identified by use of terms such as “may,” “will,” “should,” “plan,”
“project,” “expect,” “anticipate,” “estimate” and similar words,
although some forward-looking statements are expressed differently.
These forward-looking statements are based upon the Company’s
current expectations and assumptions and are subject to various
risks and uncertainties that could cause actual results and
performance to differ materially. Some of these risks and
uncertainties are described in the Company’s filings with the
Securities and Exchange Commission, including in the “Risk Factors”
section of its annual report on Form 10-K for the fiscal year ended
January 28, 2023. Included among the risks and uncertainties that
could cause actual results and performance to differ materially are
the risk that the Company will be unsuccessful in gauging fashion
trends and changing consumer preferences, the risks resulting from
the highly competitive nature of the Company’s business and its
dependence on consumer spending patterns, which may be affected by
changes in economic conditions (including inflation), the risks
related to the COVID-19 pandemic, including the impact of the
COVID-19 pandemic on our business or the economy in general, the
risk that the Company’s strategic initiatives to increase sales and
margin are delayed or do not result in anticipated improvements,
the risk of delays, interruptions, disruptions and higher costs in
the Company’s global supply chain, including resulting from
COVID-19 or other disease outbreaks, foreign sources of supply in
less developed countries, more politically unstable countries, or
countries where vendors fail to comply with industry standards or
ethical business practices, including the use of forced, indentured
or child labor, the risk that the cost of raw materials or energy
prices will increase beyond current expectations or that the
Company is unable to offset cost increases through value
engineering or price increases, various types of litigation,
including class action litigations brought under consumer
protection, employment, and privacy and information security laws
and regulations, the imposition of regulations affecting the
importation of foreign-produced merchandise, including duties and
tariffs, the uncertainty of weather patterns, the risk that we may
be unable to consummate the Term Loans as anticipated, or at all,
or obtain alternative financing. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date they were made. The Company undertakes no
obligation to release publicly any revisions to these
forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
The Children’s Place
Contact:
Investor Relations (201) 558-2400 ext. 14500
Mithaq Contact:
Mithaq-Capital@MithaqHolding.com
Media Contact:
Mithaq@Longacresquare.com
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