UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM SD

 

Specialized Disclosure Report

 

The Children’s Place, Inc.

(Exact name of the registrant as specified in its charter)

 

Delaware	0-23071	31-1241495
(State of other jurisdiction of	(Commission	(IRS Employer
incorporation or organization)	File Number)	Identification No.)

 

 

500 Plaza Drive, Secaucus NJ	07094
(Address of principal executive offices)	(Zip code)

 

Jared E. Shure, Senior Vice President, General Counsel and Secretary

(201) 453-7049

 

 

(Name and telephone number, including area code, of the

person to contact in connection with this report.)

 

 

Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:

 

x   Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2023.

 

 

 

Section 1 - Conflict Minerals Disclosure

 

Item 1.01 Conflict Minerals Disclosure and Report

 

Conflict Minerals Disclosure

 

This Specialized Disclosure Form (“Form SD”) of The Children’s Place, Inc., together with the associated Conflict Minerals Report (Exhibit 1.01), is filed pursuant to Rule 13p-1 (the “Rule”) under the Securities Exchange Act of 1934, as amended, for the reporting period from January 1 through December 31, 2023.

 

A copy of this Form SD and the Conflict Minerals Report is publicly available at http://corporate.childrensplace.com in the “Corporate Overview” section under the “Investor Relations” tab and in the section entitled “Financial Info – SEC Filings.”

 

Item 1.02 Exhibit

 

The Conflict Minerals Report required by Item 1.01 is filed as Exhibit 1.01 to this Form SD.

 

Section 2 - Exhibit

 

Item 2.01 Exhibit

 

The following exhibit is filed as part of this report.

 

Exhibit 1.01

Conflict Minerals Report as required by Items 1.01 and 1.02 of this Form SD.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the duly authorized undersigned.

 

THE CHILDREN’S PLACE, INC.

(Registrant)

 

By:	/s/ Jared E. Shure	May 31, 2024
(Signature and Title)*		(Date)
Name:	Jared E. Shure
Title:	Senior Vice President, General Counsel and Secretary

 

*Print name and title of the registrant’s signing executive officer under his or her signature.

 

 

 Exhibit 1.01

 

Conflict Minerals Report

 

THE CHILDREN’S PLACE, INC.

Conflict Minerals Report

For the Year Ended December 31, 2023

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Conflict Minerals Report contains or may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to the Company’s strategic initiatives and results of operations, including adjusted net income (loss) per diluted share. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “project,” “expect,” “anticipate,” “estimate,” and similar words, although some forward-looking statements are expressed differently. 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 and performance to differ materially. Some of these risks and uncertainties are described in the Company’s filings with the Securities and Exchange Commission, including in the “Risk Factors” section of its annual report on Form 10-K for the fiscal year ended February 3, 2024. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unable to achieve operating results at levels sufficient to fund and/or finance the Company’s current level of operations and repayment of indebtedness, the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, the risks resulting from the highly competitive nature of the Company’s business and its dependence on consumer spending patterns, which may be affected by changes in economic conditions (including inflation), the risk that changes in the Company’s plans and strategies with respect to pricing, capital allocation, capital structure, investor communications and/or operations may have a negative effect on our business, the risk that the Company’s strategic initiatives to increase sales and margin, improve operational efficiencies, enhance operating controls, decentralize operational authority and reshape the Company’s culture are delayed or do not result in anticipated improvements, the risk of delays, interruptions, disruptions and higher costs in the Company’s global supply chain, including resulting from disease outbreaks, foreign sources of supply in less developed countries, more politically unstable countries, or countries where vendors fail to comply with industry standards or ethical business practices, including the use of forced, indentured or child labor, the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, various types of litigation, including class action litigations brought under securities, consumer protection, employment, and privacy and information security laws and regulations, the imposition of regulations affecting the importation of foreign-produced merchandise, including duties and tariffs, risks related to the existence of a controlling shareholder, and the uncertainty of weather patterns. Readers of this Conflict Minerals Report are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. 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.

 

1.     Introduction

 

This Conflict Minerals Report has been prepared by The Children’s Place, Inc. and its subsidiaries (herein referred to as “The Children’s Place,” the “Company,” “we,” “us,” or “our”) pursuant to Rule 13p-1 (the “Rule”) promulgated under the Securities Exchange Act of 1934, as amended, for the reporting period from January 1 through December 31, 2023 (the “Reporting Period”).

 

The Children’s Place, Inc. and its subsidiaries operate an omni-channel children’s specialty portfolio of brands with an industry-leading digital-first operating model. The Company designs, contracts to manufacture, and sells fashionable, high-quality apparel, accessories and footwear predominantly at value prices, primarily under the Company’s proprietary brands: “The Children’s Place”, “Gymboree”, “Sugar & Jade”, and “PJ Place”. As of February 3, 2024, the Company had a total of 523 stores in the United States, Canada, and Puerto Rico, online stores at www.childrensplace.com and www.gymboree.com, and the Company’s six international franchise partners operated 225 international points of distribution in 16 countries.

 

 

The Rule requires companies to disclose their use of conflict minerals (as defined below) if those minerals are “necessary to the functionality or production of a product” manufactured or contracted to be manufactured by those companies. The conflict minerals covered by the Rule are tantalum, tin, gold, tungsten (“3TG”) or any other mineral or its derivatives determined by the U.S. Secretary of State to be financing conflict in the Democratic Republic of the Congo or an adjoining country, i.e., any of Angola, Burundi, Central African Republic, Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda, and Zambia (collectively, the “Covered Countries”).

 

The Company has determined that it contracts to manufacture certain products for which one or more of the 3TG metals are necessary to the functionality or production of those products. Accordingly, the Company conducted a reasonable country of origin inquiry (or “RCOI”) and due diligence as required by the Rule.

 

2.     Reasonable Country of Origin Inquiry

 

The Company is far removed from the sources of ore from which minerals are produced, and the smelters or refineries (“SORs”) that process those ores. The efforts undertaken to identify the country(ies) of origin of those ores reflect the Company’s circumstances and position in the supply chain. The Company must rely on information obtained from direct suppliers, who in turn, must obtain information from upstream suppliers, on the origin of the 3TG used in the products manufactured for the Company. Such information may be inaccurate or incomplete.

 

The Company has a conflict minerals team (or “CMT”) that manages the implementation and progress of its RCOI and due diligence efforts. The team is composed of representatives from the Company’s legal and global sourcing departments, as well as a conflict minerals third-party service provider (the “CMT Service Provider”).

 

As part of the Company’s RCOI process, the Company developed a risk-based approach that focused on direct suppliers of finished products, as well as suppliers that are reasonably likely to supply components or trims containing one or more of the 3TG metals (together, the “In-Scope Suppliers”) which could have originated from the Covered Countries.

 

In-Scope Suppliers were asked to complete the Conflict-Free Sourcing Initiative’s Conflict Minerals Reporting Template (the “CMRT”). Only CMRT’s version 4.0 or higher were accepted. The Company believes that the CMRT is generally regarded as the most common reporting tool for conflict minerals content and sourcing information worldwide, developed by several of the world’s leading consumer electronics brands. As such, the Company believes the process was reasonably designed and performed in good faith.

 

The CMRT includes questions regarding the presence and sourcing of 3TG used in the products supplied to the Company, the In-Scope Supplier’s conflict minerals policy, due diligence process, and information about its supply chain, including the names and locations of SORs.

 

The CMRT responses were evaluated for plausibility, consistency, and gaps. Based on the In-Scope Supplier’s response, additional follow-up was performed, as necessary.

 

The response rate among In-Scope Suppliers was 58%.

 

Of those responding In-Scope Suppliers, 0% reported one or more of the 3TG metals as necessary to the functionality or production of the products they manufactured for the Company. Based on the responses received, the Company was unable to confirm or form the basis for a reasonable belief whether any of the 3TG metals used in products manufactured for the Company originated from the Covered Countries, or came from recycled or scrap sources.

 

A description of the standard due diligence process undertaken by the Company to ascertain the chain and custody of any identified 3TG metals is described below.

 

 

3.     Due Diligence

 

A.            Design of Due Diligence

 

The Company’s due diligence measures are designed to conform, in all material respects, with the due diligence framework presented by the Organisation for Economic Co-operation and Development (“OECD”) in the publication OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Second Edition, OECD Publishing (OECD Guidance) and related Supplements on Tin, Tantalum, and Tungsten and on Gold.

 

B.            Due Diligence Performed

 

The Company performed its due diligence as follows:

 

Step 1: Establish a Strong Company Management System

 

Policies and Procedures

 

The Company communicated its conflict minerals policy to all In-Scope Suppliers. In addition, the Company’s terms and conditions contain provisions regarding conflict minerals compliance. In-Scope Suppliers are required to comply with the conflict minerals policy and the terms and conditions.

 

Internal Team

 

As mentioned above, the Company has a conflict minerals team that manages the implementation and progress of its RCOI and due diligence efforts.

 

Control Systems

 

The Company has in place the following controls: (i) a company-wide business code of conduct that outlines expected behaviors for all Company associates, and (ii) a vendor code of conduct that outlines expected behavior and working conditions for vendors and suppliers.

 

Maintain Records

 

The Company has a records retention policy that provides that relevant materials must be preserved for appropriate periods.

 

Supplier Engagement

 

The Company utilized members of its global sourcing team and the CMT Service Provider to engage with In-Scope Suppliers on the exchange of supply chain and conflict minerals related information.

 

Step 2: Identify and Assess Risks in the Supply Chain

 

If there were any In-Scope Suppliers who identified the use of one or more 3TG metals in products supplied to the Company, further investigation would be performed to determine the source and chain-of-custody of the 3TG, and specifically, whether the SOR of the 3TG is known or thought to be sourcing from the Covered Countries.

 

The following internationally accepted audit standards are relied on to determine which SORs are considered “DRC Conflict Free”: the Responsible Minerals Assurance Process (“RMAP”), the London Bullion Market Association Good Delivery Program (“LBMA”) and the Responsible Jewellery Council Chain-of-Custody Certification (“RJC”).

 

If the SOR is not certified by an internationally-recognized scheme, additional research (internet, industry and government associations) and outreach (email and telephone) with the SOR would be performed to confirm the data provided in the CMRT and to gain more information about their sourcing practices, including countries of origin and transfer, and whether there were any internal due diligence procedures in place or other processes the SORs took to track the chain-of-custody on the source of its mineral ores.

 

 

Step 3: Design and Implement a Strategy to Respond to Risks

 

The CMT received regular updates on the RCOI and due diligence efforts. Findings were reported to senior management.

 

Where the Company determines an In-Scope Supplier is using conflict minerals in products manufactured for the Company, the Company will work with the In-Scope Supplier to ensure the minerals are sourced from registered conflict free smelters or the minerals are eliminated from use. During the Reporting Period, there were no instances that required the Company to implement risk mitigation efforts, temporarily suspend trade or disengage with a supplier for sourcing and using conflict minerals in products manufactured for the Company.

 

Step 4: Carry out independent third-party audit of smelter/refiner’s due diligence at identified points in the supply chain

 

The Company does not have a direct relationship with SORs and therefore does not perform or direct audits of these entities.

 

Step 5: Reports on Supply Chain Due Diligence

 

This Conflict Minerals Report constitutes the Company’s annual report on its conflict minerals due diligence. The Report is available at http://corporate.childrensplace.com in the “Corporate Overview” section under the “Investor Relations” tab and in the section entitled “Financial Info – SEC Filings.”

 

C.            Due Diligence Findings

 

Given the Company’s position in the supply chain and the CMRT responses from In-Scope Suppliers, the Company is unable to determine whether the 3TG present in its products originated in the Covered Countries or financed or benefited armed groups in those countries.

 

Product Description

 

The products at issue are children’s apparel, accessories and footwear.

 

Country of Origin

For the Reporting Period, none of the respondents indicated that they supplied the Company with products containing 3TG. As a result, there was no data available to conduct further diligence into the country of origin of any 3TG.

 

Independent Private Sector Audit

 

For the Reporting Period, the company is not required to obtain an independent private sector audit of the Conflict Minerals Report.

 

4.     Steps to Improve Due Diligence

 

The Company continues to take the following steps to improve due diligence processes in place, namely:

 

·

Continue engagement with In-Scope Suppliers and direct them to information and training resources in order to improve the content of the In-Scope Suppliers CMRT responses;

 

·

Continue to require In-Scope Suppliers not to use any conflict minerals in products manufactured for the Company; and

 

·

Work with In-Scope Suppliers, if found to be providing the Company with components or materials containing minerals from sources that support conflict in the Covered Countries, to establish an alternative source of minerals that does not support such conflict.