The Children’s Place secured a $130 million term loan as part of a move to strengthen its financial footing.

In a Feb. 16 filing with the U.S. Securities & Exchange Commission, the Secaucus-based children’s apparel retailer reported it signed a non-biding agreement with distressed investment specialist Gordon Brothers. The company will use the proceeds to repay an existing $50 million loan from lenders.

According to the filing, the capital would also go toward paying money owed to vendors and other business purposes.

The update comes a day after The Children’s Place informed shareholders that Saudi Arabian investor group Mithaq Capital now holds a 54% controlling stake in the company. And, that Mithaq plans to nominate 11 people to the board at the company’s annual shareholder meeting.

The Children’s Place also said it accepted the new majority-investor’s offer to assist with liquidity needs.

Mithaq – a Saudi family investment firm with ties to the world’s biggest Islamic bank – reportedly spent $80 million over the course of three trading sessions after The Children’s Place Feb. 9 announcement it was working to shore up its finances.

Strategic alternatives

At the same time The Children’s Place signaled it would likely miss expectations for the fourth quarter of 2023, the retailer said it was in talks with lenders and advisors to obtain new financing to keep operations going and may “strategic alternatives.”

Like many other specialty retailers, The Children’s Place has evolved its approach to brick-and-mortar amid the rise of e-commerce. As part of a fleet optimization strategy, the company has worked to shift away from a traditional store concept into a digital-first business. As a result, more than 700 locations permanently closed over the past decade. The Children’s Place footprint now stands at roughly 500 stores in the U.S., Canada and Puerto Rico.

The 55-year-old company behind brands including Gymboree, Sugar & Jade and PJ Place also faces a slowdown in children’s apparel sales in North America. Analysts note a falling U.S. birth rate, discretionary spending challenges and the continued shift to online shopping. 

In addition to trimming its presence in malls, the retailer’s corporate workforce was reduced by 17% over the past year.

The Children’s Place also said it will end the lease for its Secaucus headquarters early to “capitalize on the prevailing tenant-favorable market conditions.” It is unclear what the company’s plans are for after it leaves the Hudson County property in May 2024.

Editor’s note: This story was updated at 4:14 p.m. ET Feb. 16, 2024, to correct the amount Mithaq spent over the over the course of three trading sessions to $80 million.