Children's Place unit files for bankruptcy

SECAUCUS, N.J. The Children's Place Retail Stores subsidiary, Hoop Holdings, which runs the Disney Store North America business, announced on March 27 that it has filed for bankruptcy. Hoop said it also intends to pursue the transfer of a substantial portion of the DSNA business to an affiliate of The Walt Disney Company in order to maximize proceeds available to its stakeholders.

Children's Place and its other subsidiaries have not filed for bankruptcy.

As previously announced on March 20, The Children's Place Retail Stores decided to exit the DSNA business as part of the company's review of strategic alternatives. As part of the review, the current management team determined that the license agreement, originated in 2004, requires substantial investments that are not expected to deliver economic returns. The company also took into account the losses incurred by DSNA's operations, DSNA's current earnings prospects as a licensee, and the restrictions imposed by the license agreement on the sale of the business to a party other than The Walt Disney Company. It was therefore concluded that the company will be in a better position to maximize value by focusing on its namesake Children's Place brand.