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):
March
18,
2008
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THE
CHILDREN’S PLACE RETAIL STORES,
INC.
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(Exact
Name of Registrants as Specified in
Their Charters)
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Delaware
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(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
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(Registrant’s
Telephone Number, Including Area
Code)
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Not
Applicable
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(Former
Name or Former Address, if Changed Since Last
Report)
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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
2.02 |
Results
of Operations and Financial
Conditions. |
On
March
20, 2008, The Children’s Place Retail Stores, Inc. (the “Company”) issued a
press release containing its fiscal 2007 fourth quarter and full year financial
results.
A
copy of
the press release relating to the foregoing is attached hereto as Exhibit 99.1
and is incorporated in this Item 2.02 by reference.
| Item
2.05 |
Costs
Associated with Exit or Disposal Activities.
|
On
March
20, 2008, the Company announced that it expects to exit the Disney Store North
America (“DSNA”) business conducted by its subsidiaries, Hoop Retail Stores, LLC
and Hoop Canada, Inc. (collectively, “Hoop”). In connection with such exit, the
Company currently estimates that it may incur pre-tax cash costs in the range
of
$50 million to $100 million, payable over a period of time. The Company is
unable to make a determination at this time of the total amount of each type
of
cost included in the estimated range of expenses.
The
Company expects that the above charges will result in future cash expenditures
within its estimated range.
A
copy of
the press release relating to the foregoing is attached hereto as Exhibit
99.1.
| Item
2.06 |
Material
Impairments. |
As
a
result of the Company’s previously announced strategic review of its operations,
which included consideration of the exit from the DSNA business and the
determination to cease construction of the building the Company had planned
to
use as its corporate headquarters (“Emerson Building”), the Company conducted an
impairment test on the carrying amounts of the DSNA business and the Emerson
Building. The impairment test indicated that the estimated values of the DSNA
business and the Emerson Building were less than their respective carrying
amounts; and, as a result, on March 18, 2008, the Audit Committee of the Board
of Directors concluded that a material charge for impairment must be recognized
to reduce the carrying amounts of these assets to their estimated fair
values.
The
Company currently estimates approximately $96.9 million in asset impairment
charges, including $80.3 million in impairments related to the decision to
exit
the DSNA business, $14.8 in impairments related to the decision to cease
construction of the Emerson Building, and $1.8 million of impairment related
to
12 underperforming stores.
A
copy of
the press release relating to the foregoing is attached hereto as Exhibit
99.1.
The
Company disclosed on March 20, 2008, that it has decided to exit the DSNA
business after a review of the operation, its potential for earnings growth,
its
capital needs and its ability to fund such needs from its own resources.
The
Company and Hoop are actively pursuing available alternatives for immediately
implementing the exit from the DSNA business, including a possible disposition
by Hoop of a substantial portion of the business or other means to terminate
its
operations. The Company and Hoop are in an advanced phase of discussions
with
The Walt Disney Company (“Disney”) regarding the terms under which Disney might
regain ownership and control of approximately two-thirds of the existing
stores
operated by Hoop. Hoop and the Company intend to disclose the arrangements
for
exiting the DSNA business in the very near term.
The
Company expects to incur costs associated with the exit and has recognized
a
material impairment in connection with the decision as described above in Items
2.05 and 2.06, respectively, of this current report on Form 8-K and in the
press
release attached as Exhibit 99.1 hereto.
The
DSNA
business is conducted by Hoop under a license agreement (the “License
Agreement”) with TDS Franchising, LLC, an affiliate of Disney. Hoop recently
received notices of several material breaches under the License Agreement.
Hoop
believes it has cured some of the asserted breaches and intends to cure or
to
assert defenses to other asserted breaches.
A
copy of
the press release relating to the foregoing is attached hereto as Exhibit
99.1.
Forward-Looking
Statements
This
Current Report on Form 8-K 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.
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 reports on Forms 10-K and 10-Q. Risks and uncertainties relating
to the exit of the DSNA business operations and other elements of the Company’s
strategic review could also cause actual results, events and performance to
differ materially. Readers 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.
| Item 9.01 |
Financial
Statement and Exhibits. |
| (d) |
Exhibits. |
| |
|
| Exhibit 99.1 |
Press release issued
by the
Company dated March 20, 2008. |
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.
| Date:
March 20,
2008 |
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THE
CHILDREN’S PLACE RETAIL
STORES,
INC.
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By: |
/s/
Susan J. Riley |
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Name:
Susan
J. Riley
Title:
Executive
Vice President, Finance
and
Administration
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