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Children’s Place Considers New Financing Options

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Shares of Children’s Place, a leading children’s specialty retailer, experienced a sharp decline on Friday as the company announced its exploration of strategic alternatives for new financing. The stock plummeted 41% to $11.73, wiping out previous gains and hitting the lowest intraday level in over two decades. Over the past year, shares have lost a staggering 72% of their value.

In a statement released early on Friday, Children’s Place disclosed its collaboration with advisors, lenders, and potential lenders in its quest to secure fresh capital. In the event that obtaining additional funding becomes unviable, the company stated that it is actively considering various strategic alternatives.

As of February 3rd, the retailer estimated its total liquidity to be $45 million and projected its total debt on that date to amount to $277 million.

Preliminary results for the fourth quarter indicate that Children’s Place is likely to report an adjusted operating loss. This outcome can be attributed to aggressive discounting during the holiday season, a higher-than-anticipated number of split shipments to meet the demands of e-commerce, and an increase in inventory valuation.

Additionally, Children’s Place has revised its sales guidance for the period, now expecting sales to range between $454 million and $456 million. This adjustment is lower than the previously forecasted sales of $460 million to $465 million.

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