UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant to
Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
report (Date of earliest event reported):
September
24, 2007
THE
CHILDREN’S PLACE RETAIL STORES, INC.
(Exact
Name of Registrants as Specified in Their Charters)
Delaware
(State
or
Other Jurisdiction of Incorporation)
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0-23071
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31-1241495
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(Commission
File Number)
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(IRS
Employer Identification No.)
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915
Secaucus Road, Secaucus, New Jersey
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07094
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(Address
of Principal Executive Offices))
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(Zip
Code)
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(201)
558-2400
(Registrant’s
Telephone Number, Including Area Code)
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General
Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
5.02 Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers
(b)
At
the
request of the Board of Directors (the “Board”) of The Children’s Place Retail
Stores, Inc. (the “Company”), Mr. Ezra Dabah resigned on September 24, 2007
during a meeting of the Board from his position as Chief Executive Officer
of
the Company and from all other officer positions of the Company and all
positions as an officer or director of any of the Company’s subsidiaries. Mr.
Dabah will continue to serve as a member of the Board. Mr. Dabah will receive
the
severance he is entitled to pursuant to section 5.01 of his employment
agreement, dated May 12, 2006;
the
Company
has not entered into any additional
agreement with Mr. Dabah
concerning additional severance benefits.
(c)
The
Board
on September 26, 2007 elected Mr. Charles Crovitz, a current Board member,
as
Interim Chief Executive Officer (“Interim CEO”) at a continuation, after a
recess, of the same meeting of the Board at which Mr. Dabah resigned. It
is
anticipated that Mr. Crovitz will serve in such position until the election
by
the Board of a permanent chief
executive officer.
Ms.
Sally Frame Kasaks, the Lead Director, will continue as Acting Chair of the
Board of Directors. The Company continues to search for two new independent
Board members and will designate a permanent Chair of the Board as soon as
practicable.
Mr.
Crovitz, age 54, has served as a Director of the Company since 2004 and has
served as the Chairman of the Compensation Committee and a member of the
Corporate Governance Committee of the Board. His service on these committees
ended with his election as Interim CEO. Mr. Crovitz is a 28-year retail veteran
who began his career at McKinsey & Co. consulting retail clients in the
areas of strategy, organization and operations. Since 2003, Mr. Crovitz has
operated Crovitz Consulting Company. Mr. Crovitz worked at Gap Inc. from
1993 to
2003, most recently serving for five years as its Executive Vice President
&
Chief Supply Chain Officer. Prior to the Gap, Inc., Mr. Crovitz was Senior
Vice
President, Management Information Systems for Safeway, one of the largest
grocery retailers in North America. Mr. Crovitz currently serves on the Board
of
Directors of United Stationers Inc. and previously served on the Board of
Directors of Quick Response Systems. Mr. Crovitz received his undergraduate
degree from University of California, Berkeley, and his Masters of Business
Administration and Juris Doctorate from Stanford University.
At
the
Board meeting referred to above, the Compensation Committee was authorized
to
determine Mr. Crovitz’s compensation for his service as Interim CEO.
Compensation arrangements for Mr. Crovitz have not yet been
determined.
A
copy of
a press release relating to the foregoing is attached hereto as Exhibit 99.1
and
is incorporated in this Item 5.02 by reference.
2
Item
8.01 Other
Events
In
connection with Mr. Dabah’s resignation referred to in Item 5.02, the Board will
engage a search firm to conduct a search for a permanent chief
executive officer.
On
September 24,
2007,
the Company learned that a stockholder class action was filed on September
21,
2007 against the Company and certain of its current and former senior executives
in the United States District Court, Southern District of New York. It alleges,
among other things, that certain of the Company’s current and former officers
made statements to the investing public which misrepresented material facts
about the business and operations of the Company, or omitted to state material
facts
required
in order for the statements made by them not to be misleading, causing the
price
of the Company’s stock to be artificially inflated in violation of provisions of
the Securities Exchange Act of 1934, as amended. It alleges that more recent
disclosures establish the misleading nature of these earlier disclosures.
The
complaint seeks money damages plus interest as well as costs and disbursements
of the lawsuit. The
complaint has
not yet
been served on the Company. The Company intends to vigorously contest these
allegations and the claims made.
As
previously reported in a press
release made on January 31, 2007 and a Form
8-K
filed with the Securities and Exchange Commission on February 1, 2007, the
recommendations
of the special
committee of the Board of Directors appointed to investigate the company’s stock
option grant practices included
a
comprehensive review, with the assistance of independent counsel, by
the
Board of Directors of
the
Company's governance system and processes and its internal controls.
As
previously reported in a press release made, and Form 8-K filed with the
Securities and Exchange Commission, on August 23, 2007, in connection with
the
application of enhanced internal controls that the Company had instituted
as
part of the changes in its governance and internal controls resulting from
this
review,
the
Company had identified certain violations of the Company's policies and
procedures by two members of the Company’s senior management, which
were under consideration by the Board of Directors.
On
September 26, 2007, the Company issued a press release announcing that the
Board
had completed
its consideration of these violations and had determined, among other things,
that none of the violations have a material affect on the Company’s operating
results. The Company also stated that the Board had imposed significant
sanctions on the individuals involved,
including the Company’s Chief Executive Officer, who, as reported above, had
resigned from that position.
A
copy of
the September 26, 2007 press release is included as Exhibit 99.2
hereto.
The
Company has
completed its investigation of
the
violations of the Company’s policies and procedures referred to in its August
23, 2007 release and no other internal investigations are underway.
Item
9.01 Financial
Statement and Exhibits.
(d) Exhibits.
Exhibit
99.1 Press
Release of The Children’s Place Retail Stores, Inc. dated September 26,
2007
Exhibit
99.2 Second
Press Release of The Children’s Place Retail Stores, Inc. dated September 26,
2007
3
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly cause this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date:
September 28, 2007
| THE CHILDREN’S PLACE RETAIL STORES, INC. | ||
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| By: | /s/ Susan J. Riley | |
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Name: Susan J. Riley |
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| Title: Executive Vice President and Interim Chief Financial Officer | ||
4
EXHIBIT
INDEX
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Exhibit
No.
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Description
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99.1
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Press
Release of The Children’s Place Retail Stores, Inc. dated September 26,
2007
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99.2
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Second
Press Release of The Children’s Place Retail Stores, Inc. dated September
26, 2007
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5
[logo]
FOR
IMMEDIATE RELEASE
THE
CHILDREN’S PLACE RETAIL STORES, INC.
ANNOUNCES
CEO CHANGE
- Ezra
Dabah Resigns as Chief Executive Officer -
- Director
Chuck Crovitz Named Interim Chief Executive Officer -
Secaucus,
New Jersey - September 26, 2007 - The Children’s Place Retail Stores, Inc.
(Nasdaq: PLCE) today
announced that Mr. Ezra Dabah has resigned from his position as the Company’s
Chief Executive Officer, at the request of the Board of Directors, effective
immediately. Mr. Dabah will remain a member of the Board of Directors. The
Company’s Board of Directors has named Chuck Crovitz, a current Board member, as
Interim Chief Executive Officer.
The
Board
of Directors will soon engage a search firm to conduct an executive search
for a
permanent successor to Mr. Dabah. Ms. Kasaks, the Lead Director, will continue
as Acting Chair of the Board of Directors. The Company continues to search
for
two new independent board members and will designate a permanent Chair of
the
Board as soon as possible.
Chuck
Crovitz, 54, has served as a Director of the Company since 2004 and Chairman
of
the Compensation Committee. Mr. Crovitz is a 28-year retail veteran who began
his career at McKinsey & Co. consulting retail clients in the areas of
strategy, organization and operations. Since 2003, Mr. Crovitz has operated
Crovitz Consulting Company. Mr. Crovitz worked at Gap Inc. (NYSE: GPS) from
1993
to 2003, most recently serving for five years as its Executive Vice President
& Chief Supply Chain Officer. Mr. Crovitz currently serves on the Board of
United Stationers Inc. (Nasdaq: USTR) and previously served on the Board
of
Quick Response Systems (Nasdaq: QRSI). He received his undergraduate degree
from
University of California, Berkeley, and his MBA and JD from Stanford University.
In
light
of Mr. Dabah’s resignation and the change in executive roles, the Company
expects that additional time will be required before the Company can complete
its overdue Annual Report on Form 10-K for the fiscal year ended February
3,
2007, including its audited financial statements for such year, and its other
overdue SEC periodic reports. This delay is necessary in order for Mr. Crovitz
to become familiar enough with the Company in order to make the necessary
management representations for the Company’s independent auditors and
certification of SEC reports. The Company intends to complete and file such
reports as soon as practicable.
As
previously announced, the Company has received an extension until November
14,
2007 from the Board of Directors of the Nasdaq Stock Market to satisfy Nasdaq’s
requirement that the Company be current in its SEC periodic reporting
obligations. If the Company is unable to satisfy the current or any extended
deadline, it continues to anticipate that its shares will be delisted from
the
Nasdaq Stock Market.
As
noted
in a separate release issued today by the Company, the Board of Directors
announced that it has resolved previously identified code of conduct violations
involving two executives, including Mr. Dabah.
-
more
-
PLCE:
Company Announces CEO Change
Page
2
The
Children’s Place Retail Stores, Inc. is a leading specialty retailer of
children's merchandise. The Company designs, contracts to manufacture and
sells
high-quality, value-priced merchandise under the proprietary “The Children’s
Place” and licensed “Disney Store” brand names. As of September 1, 2007, the
Company owned and operated 889 The Children’s Place stores and 328 Disney Stores
in North America and its online stores at www.childrensplace.com and
www.disneystore.com.
This
press release may contain certain forward-looking statements regarding future
circumstances. These forward-looking statements are based upon the Company's
current expectations and assumptions and are subject to various risks and
uncertainties that could cause actual results to differ materially from those
contemplated in such forward-looking statements including, in particular,
the
risks and uncertainties described in the Company's filings with the Securities
and Exchange Commission, as well as the risks and uncertainties relating
to the
Company's stock option granting practices and the completed investigation
by the
special committee of the Company's Board of Directors, the previously announced
pending restatement of the Company's historical financial statements, the
delays
in filing the Company's periodic reports with the Securities and Exchange
Commission, the pending NASDAQ proceedings regarding the Company's continued
listing, the outcome of the informal investigation of the Company being
conducted by the Securities and Exchange Commission, potential other
governmental proceedings, the shareholder litigation commenced against the
Company and certain of its officers and directors, and the potential impact
of
each of these matters on the Company. Actual results, events, and performance
may differ. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
undertakes no obligation to release publicly any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
The
inclusion of any statement in this release does not constitute an admission
by
the Company or any other person that the events or circumstances described
in
such statement are material.
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Contact:
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The
Children’s Place Retail Stores, Inc.
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Investors:
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Susan
Riley, EVP, Finance & Administration, 201-558-2400
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Heather
Anthony, Senior Director, Investor Relations, 201-558-2865
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||
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Media:
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Melissa
Merrill/Cara O’Brien/Leigh Parrish, FD,
212-850-5600
|
|
###
[logo]
FOR
IMMEDIATE RELEASE
THE
CHILDREN’S PLACE RETAIL STORES, INC. ANNOUNCES COMPLETION OF INTERNAL
INVESTIGATIONS
Secaucus,
New Jersey - September 26, 2007 - The Children’s Place Retail Stores, Inc.
(Nasdaq: PLCE) today
announced that its Board of Directors had completed its previously reported
consideration of investigations by its Audit Committee into violations
by two
members of the Company’s senior management of the Company’s policies and
procedures.
In
one
case, irregularities in expense reimbursement practices were involved on
the
part of the Chief Creative Officer at The Children’s Place brand. The Board
concluded that the irregularities violated the Company’s Code of Business
Conduct, involving gross inattention to the pertinent requirements of the
Company’s policies, but did not involve an intentional effort to obtain an
improper personal benefit. The Board imposed significant sanctions on the
individual involved, including refund of amounts erroneously charged to
the
Company, a change in position so that the individual will no longer be
an
officer of the Company and reimbursement of the Company’s out-of-pocket costs
incurred in connection with its investigation of the matter, but concluded
that
dismissal from employment was not warranted.
The
other
case involved two instances where the Company’s former Chief Executive Officer
did not comply with the Company’s internal policies related to securities
trades. In one instance, he did not properly report to the Company an immaterial
increase in his wife’s ownership of Company shares as a result of a trust
distribution. In the second, on two occasions he pledged shares of the
Company
pursuant to a customary margin account during a “black-out period” when prior
approval of the Company’s Board was required for such pledges. The Board
concluded that these actions violated the Company’s Code of Business Conduct,
but that no improper personal benefit was obtained nor did the violations
have a
material adverse affect on the Company. The Board imposed significant sanctions
for committing the violations, including new requirements pertaining to
securities transactions by the individual and a requirement that he reimburse
the Company for its out-of-pocket costs in investigating the
violations.
None
of
the violations have a material affect on the Company’s operating results. The
Company is instituting additional expense reimbursement procedures and
additional training in the requirements of the Company’s Code of Conduct and
related policies and procedures to help ensure against future similar
violations.
As
noted
in a separate release issued today, the Company announced a CEO
change.
The
Children’s Place Retail Stores, Inc. is a leading specialty retailer of
children's merchandise. The Company designs, contracts to manufacture and
sells
high-quality, value-priced merchandise under the proprietary “The Children’s
Place” and licensed “Disney Store” brand names. As of September 1, 2007, the
Company owned and operated 889 The Children’s Place stores and 328 Disney Stores
in North America and its online stores at www.childrensplace.com and
www.disneystore.com.
-
more
-
PLCE:
Company Announces Completion of Internal Investigations
Page
2
This
press release may contain certain forward-looking statements regarding
future
circumstances. These forward-looking statements are based upon the Company's
current expectations and assumptions and are subject to various risks and
uncertainties that could cause actual results to differ materially from
those
contemplated in such forward-looking statements including, in particular,
the
risks and uncertainties described in the Company's filings with the Securities
and Exchange Commission, as well as the risks and uncertainties relating
to the
Company's stock option granting practices and the completed investigation
by the
special committee of the Company's Board of Directors, the previously announced
pending restatement of the Company's historical financial statements, the
delays
in filing the Company's periodic reports with the Securities and Exchange
Commission, the pending NASDAQ proceedings regarding the Company's continued
listing, the outcome of the informal investigation of the Company being
conducted by the Securities and Exchange Commission, potential other
governmental proceedings, the shareholder litigation commenced against
the
Company and certain of its officers and directors, and the potential impact
of
each of these matters on the Company. Actual results, events, and performance
may differ. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The
Company
undertakes no obligation to release publicly any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
The
inclusion of any statement in this release does not constitute an admission
by
the Company or any other person that the events or circumstances described
in
such statement are material.
|
Contact:
|
The
Children’s Place Retail Stores, Inc.
|
|
|
Investors:
|
Susan
Riley, EVP, Finance & Administration, 201/558/2400;
|
|
|
Heather
Anthony, Senior Director, Investor Relations, 201/558-2865
|
||
|
Media:
|
Melissa
Merrill/Cara O’Brien/Leigh Parrish, FD,
212-850-5600
|
|
###