UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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The Children's Place Retail Stores, Inc.
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(Name of Registrant as Specified In Its Charter)
EZRA DABAH
RENEE DABAH
STANLEY SILVERSTEIN
RAINE SILVERSTEIN
BARBARA DABAH
GILA GOODMAN
RAPHAEL BENAROYA
JEREMY J. FINGERMAN
ROSS B. GLICKMAN
EMANUEL R. PEARLMAN
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On July 2, 2009, The Committee of Concerned Shareholders of The Children's
Place issued a press release, a copy of which is filed herewith as Exhibit 1.
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EXHIBIT 1
FOR IMMEDIATE RELEASE
Contacts:
Matthew Sherman / Jamie Moser
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
THE COMMITTEE OF CONCERNED SHAREHOLDERS OF THE CHILDREN'S PLACE
MAILS LETTER TO SHAREHOLDERS
Urges Shareholders to Vote FOR the Committee's Nominees on the GOLD Proxy
Card Today
New York - July 2, 2009 -The Committee of Concerned Shareholders of The
Children's Place (the "Committee"), which collectively owns approximately 22% of
the outstanding shares of The Children's Place Retail Stores, Inc. (Nasdaq:
PLCE) ("The Children's Place" or the "Company"), today announced that it is
mailing a letter to the Company's shareholders in connection with its nomination
of three independent, highly-qualified and proven individuals for election to
the Board of Directors at the Company's 2009 Annual Meeting of Shareholders,
scheduled for July 31, 2009. Shareholders of record as of June 30, 2009 are
entitled to vote at the meeting.
This upcoming election of directors is about the future of The Children's Place
- - and all votes can make a difference. The choice is clear - by voting on the
GOLD proxy card, shareholders can elect three experienced and independent Board
nominees who are dedicated to protecting and enhancing the value of The
Children's Place. The Committee urges shareholders to act now to ensure that
their shares are represented at the upcoming Annual Meeting.
The Committee today sent the following letter to all shareholders:
July 2, 2009
Dear Fellow Shareholder,
Do not be deceived by the Company's misleading statements about what is at
stake in the upcoming election of directors for The Children's Place. In a
clear act of desperation, the Company is attempting to distract you from
the important issues facing The Children's Place today. This election is
not about the past. It's about the need for change today and who can best
protect and grow your investment.
The Committee of Concerned Shareholders of The Children's Place is
convinced that our three independent nominees - Raphael Benaroya, Jeremy
Fingerman and Ross Glickman - are more qualified to serve on your Board
than the three incumbent candidates. We urge you to vote for these
dedicated individuals on the GOLD proxy card TODAY by telephone, Internet,
or by signing, dating and returning the enclosed GOLD proxy card in the
postage-paid envelope provided.
SETTING THE RECORD STRAIGHT
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Why has the Company avoided the issues and resorted to making misleading
statements about Ezra Dabah? The answer is simple: The Company's nominees
compare poorly to and lack the qualifications possessed by the Committee's
nominees. The Company has made a series of false and misleading statements
about Ezra Dabah to deflect your attention from the incumbent nominees and
their inferior track records. Let us again state the facts:
o Ezra Dabah is not a nominee for election. In fact, Mr. Dabah was
elected to the Board by shareholders last year following a unanimous
nomination by the same Board that now is engaged in personal and
misleading attacks on him.
o Mr. Dabah is not attempting to gain control of the Company. He is no
longer the Chairman and CEO and has no plans to return as Chairman
or CEO. The Committee's nominees are independent and, if elected,
will act in the best interests of all shareholders as their
fiduciary duties require. Mr. Dabah does not have any prior social,
business or professional relationship with any of the Committee's
nominees.
o The Committee's sole interest is making sure The Children's Place
has the right Board in place to protect and grow value for all
shareholders. None of the Company's nominees have ever purchased a
single share of the Company's common stock on the open market. The
members of the Committee by contrast collectively own approximately
22% of the Company's outstanding shares. Our interests are aligned
with yours. While our nominees do not currently own any shares of
the Company, they have each committed to purchase shares if elected.
Do you want to trust your investment to a group of directors who,
unlike you, have never invested their own capital in the Company?
o Do not be misled by the Company's repeated misrepresentation of the
facts surrounding Mr. Dabah's resignation as CEO. No one will
dispute that Mr. Dabah resigned around the time that Deloitte &
Touche informed the Company that it would no longer rely on his
representations. What the Company has neglected to tell you is that,
at that same time, Mr. Dabah's fellow directors did not question his
integrity and planned to terminate Deloitte and engage BDO Seidman,
which was willing to accept Mr. Dabah's representations. These
important facts are reflected in a recorded message left for Mr.
Dabah by Sally Kasaks, the Company's Interim Chair. Although the
Board considered Deloitte's position unreasonable, Mr. Dabah stepped
down as CEO to facilitate the completion of audits and to avoid
further delay in completing the Company's SEC filings.
The Company is attempting to mislead you about the past in order to
distract you from the present and the future - Do not let that happen!
WE BELIEVE THE COMPANY NOW FACES A DOWNWARD TREND THAT
JEOPARDIZES YOUR INVESTMENT
Do not be seduced by management's statements about 2008 sales performance.
The Company's 2008 sales and profits are the result of management planning
and direction in 2007. Like any vertically-integrated, specialty retailer,
The Children's Place plans, designs and merchandises its seasonal lines at
least a year in advance of presenting them in stores. The current interim
management team's product selection was presented in stores starting in
the fourth quarter of 2008 and look at the results:
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o While the Company's comparable store sales performance in the
first three quarters of 2008 were all positive with 5% average
comparable store sales growth, the fourth quarter (the first
in which the current management team made merchandising
decisions) showed a decline in comparable store sales growth
of (5%) based on the Company's prior method of reporting
comparable store sales results.
o At the end of the fourth quarter of 2008, the Company changed
its method of reporting comparable store sales, a move that
obscures the current trends in the Company's core retail
business. The "new" methodology includes e-commerce results
and adjusts for constant currency. Under this altered
methodology, the Company generated positive comparable store
sales growth of 1% in the fourth quarter of 2008, a 600 basis
point increase over the comparable store sales growth that
would have been reported using the Company's prior
methodology. Virtually all of the specialty retailers in the
Company's peer group do not employ this questionable
methodology selected by the Company's interim management.
Would you trust a board and management team that is willing to
change its disclosure methodology to make results look better
at a time when comparable store sales are generally down
across the industry?
Management is touting its 2008 performance by selectively comparing 2008
results to 2007, which was only one year that followed a successful ten
year period of growth for the Company. During the period from 2004 to 2006
for example:
o Comparable store sales increased 16%, 9% and 11%,
respectively.
o Reported net sales increased from $1.2 billion in 2004
to over $2.0 billion in 2006.
o Reported diluted net income per share increased from
$1.48 in 2004 to $2.92 in 2006.
We are concerned that the Company's 2008 results cannot be sustained.
Recent performance confirms our fears:
o The Company's stock price has decreased 26% since the
beginning of June 2009.
o Since November 2008, there has been only one month of
positive same store sales growth.
o In May 2009, the Company reported a 9% decline in
comparable store sales--its worst monthly results in
over three years (as far back as the Company has
disclosed its new comparable store sales methodology)
and 11% lower than median comparable store sales for
other value retailers.
All of this has led to a decline in the value of your investment in The
Children's Place. Today, the Company's stock is trading at a P/E multiple
that is approximately 50% of its comparable peer group. In addition, while
the Company has used selective time periods to claim that the Company's
stock price is up 39% under the current Board and management, the fact is
that the Company's stock price was $27.08 as of July 1, 2009, which is
virtually unchanged since Mr. Crovitz became Interim CEO in September
2007. Ask yourself: what value has the current Board created for you?
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We believe this decline inevitably results from an interim leadership team
and Board that have failed to protect and grow your investment in the
Company. Interim CEO Charles Crovitz has identified no viable growth
strategies and the Board has already concluded he does not meet the
Board's articulated criteria for a permanent CEO. Yet the Board has
rewarded him with excessive compensation: nearly $4,000,000 in 2008,
including over $500,000 in lavish perquisites. If Mr. Crovitz is doing a
great job, as the current Board has told you, why has the Board spent the
last 21 months looking to replace him? That's 21 months of the Board
failing to do what it acknowledges must be done!
The incumbent Board would have you believe that Interim Chair Sally Kasaks
has done great things for Pacific Sunwear. What they still haven't told
you is that she was replaced as Chair of the Board and CEO of Pacific
Sunwear after that company suffered an almost 84% stock price decline. The
Children's Place cannot afford a leader with that type of "track record."
If Ms. Kasaks is not good enough to be Chair and CEO of Pacific Sunwear,
why should she be reelected to your Board?
CHANGE IS NEEDED NOW
OUR NOMINEES ARE COMMITTED TO BRINGING THAT CHANGE
The Committee is seeking to elect three new independent directors who will
bring to the Board much-needed insight and relevant perspectives and
reposition the Company for continued and profitable growth and help drive
shareholder value. When you consider the qualifications of the Committee's
nominees against the poor track records of the incumbent nominees, we
think the choice is clear:
The Committee's Nominees The Incumbent Directors
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Raphael Benaroya: More than 25 Sally Kasaks: Just replaced as
years of senior level (including Chair of the Board and CEO of
CEO) specialty apparel retailing Pacific Sunwear after it suffered
and mass consumer marketing an almost 84% stock price decline
experience. He is currently during her tenure. While stock
Chairman of the Board of Russ prices can be affected by many
Berrie, a public company that factors, she also oversaw a 27%
specializes in the design, import, decline in Ann Taylor's stock price
marketing and distribution of when she served as CEO from 1992 to
infant and juvenile consumer 1996.
products, and has served as the
Chairman of F.A.O. Schwartz (post
bankruptcy). He was also the
Chairman, President and CEO of
United Retail Group, a public
specialty retailer of women's
fashions, from 1989 until its
successful sale in 2007.
Jeremy J. Fingerman: More than 20 Norman Matthews: 76 years old; just
years of mass marketing and brand recently appointed, not elected, to
management experience. He most The Children's Place Board. Has
recently served as President and held directorships at several
CEO of R.A.B. Food Group, companies that have
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where during his tenure, the filed for bankruptcy or been
business grew by more than 50% liquidated, including Levitz,
through organic growth initiatives Lechters(1), and Loehmann's. As
and acquisitions. Prior to joining Chairman of Galyan's Trading
R.A.B., he served as President of Company, he oversaw seven straight
the U.S. Soup Division at Campbell quarters of declining same store
Soup, during which time the U.S. sales and an 18% decline in the
soup franchise generated three Company's share price over three
consecutive years of consumption years following the IPO.
growth for the first time in 18
years.
Ross Glickman: 35 years of Malcom Elvey: limited retail
specialty retail and real estate company experience includes only a
experience, with extensive brief stint at Metro Cash and Carry
expertise in retail real estate over 30 years ago.
strategy issues and current market
developments. He is currently
Chairman and CEO of Urban Retail
Properties, a development, leasing
and management real estate company,
specializing in retail shopping
centers, with approximately 28
million square feet under
management.
The Committee believes that its independent nominees have the experience
and talent necessary to help position the Company to deliver and sustain
future growth and increase shareholder value, and that the Company's
nominees do not.
This upcoming election of directors is about the future of our Company -
and your vote can make a difference. The choice is clear - by voting on
the enclosed GOLD proxy card, you can elect three experienced and
independent Board nominees who are dedicated to protecting and enhancing
the value of your investment. We urge you to act now to ensure that your
shares are represented at the upcoming Annual Meeting.
Remember, even if you previously returned a white proxy card, you have
every legal right to change your vote. Vote your shares on the GOLD proxy
by phone or Internet by following the instructions on your GOLD proxy
card--or by signing dating and returning it in the envelope provided.
Innisfree M&A Incorporated is assisting the Committee with its efforts to
solicit your vote. If you have any questions about voting your shares,
please call Innisfree toll-free at (888) 750-5834.
Thank you for your support.
Sincerely yours,
/s/ Ezra Dabah
Ezra Dabah, on behalf of
THE COMMITTEE OF CONCERNED SHAREHOLDERS OF THE CHILDREN'S PLACE
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(1) Matthews resigned less than four months prior to the Company's
Chapter 11 filing.
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The Committee urges shareholders to vote FOR its three director nominees on the
GOLD proxy card today - by telephone, Internet or by signing, dating and
returning the GOLD proxy card. Innisfree M&A Inc. is acting as proxy solicitor
for the Committee and can be reached toll-free at (888) 750-5834.
Moelis & Company is serving as financial advisor and Cadwalader, Wickersham &
Taft LLP is serving as legal counsel for the Committee.
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Your Vote Is Important, No Matter How Many Or How Few Shares You Own.
If you have questions about how to vote your shares, or need additional
assistance, please contact the firm assisting us in the solicitation of proxies:
INNISFREE M&A INCORPORATED
Shareholders Call Toll-Free: (888) 750-5834
Banks and Brokers May Call Collect: (212) 750-5833
IMPORTANT
We urge you NOT to sign any White proxy card sent to you by The Children's
Place.
If you have already done so, you have every right to change your vote by using
the enclosed GOLD proxy card to vote TODAY--by telephone, by Internet, or by
signing, dating and returning the GOLD proxy card in the postage-paid envelope
provided.
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Important Information
In connection with The Children's Place's 2009 Annual Meeting of Shareholders,
the Committee filed a definitive proxy statement on Schedule 14A with the SEC on
June 17, 2009 containing information about the solicitation of proxies for use
at The Children's Place's 2009 Annual Meeting of Shareholders. The definitive
proxy statement and the GOLD proxy card were first disseminated to shareholders
of The Children's Place on or about June 17, 2009. SHAREHOLDERS OF THE
CHILDREN'S PLACE ARE URGED TO CAREFULLY READ THE DEFINITIVE PROXY STATEMENT
BECAUSE IT CONTAINS IMPORTANT INFORMATION. The Committee may file other
additional proxy solicitation material in connection therewith from time to
time. The definitive proxy statement and other documents relating to the
solicitation of proxies by the Committee will be available at no charge on the
SEC's website at http://www.sec.gov. In addition, the Committee will provide
copies of the definitive proxy statement and other relevant documents without
charge upon request. Request for copies should be directed to our proxy
solicitor, Innisfree M&A Incorporated, at 1-888-750-5834.
Ezra Dabah, Renee Dabah, Stanley Silverstein, Raine Silverstein, Barbara Dabah,
Gila Goodman, Raphael Benaroya, Jeremy Fingerman, Ross Glickman and Emanuel
Pearlman may be deemed to be participants in the solicitation of proxies with
respect to the Committee's nominees. Information about each of the participants
is available in the definitive proxy statement filed by the Committee with the
SEC on June 17, 2009 in connection with the solicitation of proxies for the 2009
annual meeting of The Children's Place shareholders. Information about the
participants' direct or indirect interests in the matters to be considered at
the 2009 annual meeting of Shareholders of The Children's Place, including by
security ownership or otherwise, is also contained in the definitive proxy
statement.
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