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Children’s Place files for bankruptcy, seeks buyer after suffering big losses
Children’s Place has filed for Chapter 11 bankruptcy protection as it seeks a buyer for its assets or brands and starts selling off inventory. The children’s clothing retailer cited falling sales, mounting losses and financial pressures, putting the future of its more than 500 stores and the Gymboree brand in question.
The company and 13 affiliates filed in a New Jersey court on Sunday. As of 1 August, it reported $742.3 million in assets and $881.3 million in liabilities; it lost $31 million in the three months to that date, while net sales fell 19% year on year. Restructuring adviser Lorie Beers said the company had received nine acquisition proposals, and inventory liquidations began on 6 November.
In short
- Children’s Place has filed for bankruptcy protection.
- It is seeking a buyer and liquidating inventory.
- Sales fell 19% and liabilities exceeded assets.
Explained simply
The Children’s Place is a US retailer that sells clothes for children and operates more than 500 shops. It also owns Gymboree, a children’s clothing brand.
Chapter 11 is a US legal process that lets a company try to reorganise its finances while continuing to operate. The company’s debts are greater than its reported assets, and it has reported falling sales and losses.
The outcome may affect the company’s shops, the Gymboree brand and the people who work for or shop with them. A buyer could take on some or all of its business or brands.