By Abigail Summerville
(Reuters) - The Children's Place (NASDAQ:PLCE) 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 and Gap 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.