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):
October
9, 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)
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| o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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| o |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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Item
4.01 Changes
in Registrant’s Certifying Accountant
(a) On
October 9, 2007, The Children’s Place Retail Stores, Inc. (the “Company”) was
advised by Deloitte & Touche LLP (“Deloitte”), the Company’s current
independent auditor, that it will not stand for re-election as the Company’s
independent registered public accounting firm for the fiscal year ending
February 2, 2008 (“fiscal 2007”). Deloitte will complete its current engagement
as auditor of the Company’s financial statements for the three fiscal years in
the period ended February 3, 2007 (as to which there is a pending restatement
of
previously issued financial statements for fiscal 2005 and 2004).
As
previously announced, because the financial statements for the fiscal years
ended January 29, 2005 and January 28, 2006 are being restated, these
financial statements and the related audit reports of Deloitte should no
longer
be relied upon. Such Deloitte audit reports neither contained any adverse
opinion or disclaimer of opinion, nor were such reports qualified or modified
as
to uncertainty, audit scope or accounting principles..
During
the Company’s two most recent fiscal years ended January 28, 2006 and
February 3, 2007, and during the subsequent interim period to October 9,
2007, there has been no disagreement between the Company and Deloitte on
any
matter of accounting principles or practices, financial statement disclosure,
or
auditing scope or procedure that, if not resolved to Deloitte’s satisfaction,
would have caused Deloitte to make reference to the subject matter of the
disagreement in connection with its audit report.
Other
than as described below, during the Company’s two most recent fiscal years ended
January 28, 2006 and February 3, 2007, and during the subsequent interim
period to October 9, 2007, there have been no “reportable events” (as defined in
Item 304(a)(1)(v) of Regulation S-K).
Prior
to
the resignation of the Company’s former chief executive officer on
September 24, 2007, Deloitte advised the Company that it had determined, in
its professional judgment, that it was no longer willing to rely on his
representations in connection with its audits.
The
Company’s management has determined, and discussed with Deloitte, in connection
with the preparation of the Company’s Annual Report on Form 10-K for fiscal 2006
that there are two material weaknesses in the Company’s internal control over
financial reporting.
As
previously disclosed in the Company’s January 31, 2007 press release
and in a
Current Report on Form 8-K filed with the Securities and Exchange
Commission (the “SEC”) on February 1, 2007,
in
connection with its internal investigation of option granting practices,
the
Company found that it did not maintain appropriate governance and other internal
controls relating to its option grants. Management has determined that the
lack
of adequate controls over the granting of stock options and the related
documentation constituted a material weakness, which resulted in the use
of
incorrect accounting measurement dates for certain stock option grants and
related errors in recording compensation expense.
As
previously disclosed in the Company’s August 23, 2007 press release
and in a
Current Report on Form 8-K filed with the SEC on August 23, 2007,
the
Company’s Audit Committee found that two violations of the Company’s Code of
Business Conduct by members of the Company’s senior management had occurred in
the past year. Considering these incidents, taken in the context of other
relevant circumstances, management has determined that deficiencies exist
in the
implementation of the Company’s policies and procedures, resulting in a material
weakness in the Company’s control environment.
A
material weakness is a control deficiency, or a combination of control
deficiencies, that result in a more than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented
or detected. In connection with the completion of the Company’s Annual Report on
Form 10-K for fiscal 2006, management will assess the Company’s internal control
over financial reporting as of the end of fiscal 2006. Because this report
has
not yet been completed, it is possible that additional material weaknesses
in
the Company’s internal control over financial reporting may yet be identified
and be discussed in such report.
The
Audit
Committee has discussed the subject matter of the above described reportable
events with Deloitte.
The
Company has furnished a copy of the above disclosure to Deloitte and requested
that Deloitte furnish the Company with a letter addressed to the SEC stating
whether or not Deloitte agrees with such disclosure. A copy of Deloitte’s letter
is attached as Exhibit 16.1 to this Current Report on Form 8-K.
The
Company continues to work to complete its overdue Annual Report on Form 10-K
for
fiscal 2006, including its audited financial statements, and its other overdue
SEC periodic reports as soon as practicable.
(b) On
October 15, 2007, the Company, as approved by the Audit Committee of the
Board
of Directors, engaged BDO Seidman, LLP (“BDO”) as the Company’s independent
registered public accounting firm for fiscal 2007.
During
the Company’s two most recent fiscal years ended January 28, 2006 and
January 29, 2005, and during the subsequent interim periods preceding the
engagement of BDO, the Company did not consult with BDO regarding either
(i)
the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered
on
the company’s financial statements, and neither a written report was provided to
the company nor oral advice was provided that BDO concluded was an important
factor considered by the Company in reaching a decision as to the accounting,
auditing or financial reporting issue; or (ii) any matter that was either
the
subject of a disagreement, as that term is defined in paragraph 304(a)(1)(iv)
of
Regulation S-K, or a reportable event required to be reported under paragraph
304(a)(1)(v) of Regulation S-K.
In
connection with the engagement of BDO, the Company disclosed to BDO the matters
described in Item 4.01(a) above.
The
Company has authorized Deloitte to respond fully to the inquiries of BDO
concerning Deloitte’s unwillingness to rely on the representations of the
Company’s former CEO, with respect to the two material weaknesses in the
Company’s internal control over financial reporting identified by the Company’s
management, as referred to above, and also on any other matter pertinent
to the
Company’s financial statements.
On
October 11, 2007, the Company issued a press release regarding the decision
by
Deloitte not to stand for re-election.
A
copy of
this press release is included as Exhibit 99.1 hereto.
On
October 15, 2007, the Company issued a press release regarding the engagement
of BDO.
A
copy of
this press release is included as Exhibit 99.3 hereto.
Item
8.01 Other
Events
On
October 10, 2007, the Company learned that, on October 9, 2007, a stockholder
class action was filed in the United States District Court, Southern District
of
New York, against the Company and certain of its current and former senior
executives. The complaint 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, thereby 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. According to the complaint, more recent
disclosures establish the misleading nature of these earlier disclosures.
The
complaint seeks, among other relief, class certification of the lawsuit,
compensatory damages plus interest, and costs and expenses of the lawsuit,
including counsel and expert fees. The complaint has not yet been served
on the
Company. The Company intends to vigorously contest these allegations and
the
claims made.
In
addition, on October 11, 2007, the Company issued a press release containing
its
sales results for the five-week period ended October 6, 2007.
A
copy of
this press release is included as Exhibit 99.2 hereto.
Item
9.01 Financial
Statement and Exhibits.
(d) Exhibits.
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Exhibit
16.1
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Letter
on change in certifying accountant.
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Exhibit
99.1
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Press
Release dated October 11, 2007 (regarding auditor’s decision not to stand
for re-election)
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Exhibit
99.2
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Second
Press Release dated October 11, 2007 (regarding sales
results).
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Exhibit
99.3
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Press
Release dated October 15, 2007 (regarding appointment of
auditors)
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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 undersigned hereunto
duly authorized.
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THE
CHILDREN’S
PLACE RETAIL STORES, INC. |
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| Date:
October 15, 2007 |
By: |
/s/ Susan
J.
Riley |
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Name: Susan
J. Riley |
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Title: Executive
Vice President, Finance and
Administration |
EXHIBIT
INDEX
| Exhibit
No. |
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Description
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Exhibit
16.1
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Letter
on change in certifying accountant.
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Exhibit
99.1
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Press
Release dated October 11, 2007 (regarding auditor’s decision not to stand
for re-election)
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Exhibit
99.2
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Second
Press Release dated October 11, 2007 (regarding sales
results).
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Exhibit
99.3
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Press
Release dated October 15, 2007 (regarding appointment of
auditors)
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