Children's Place former CEO, interim CEO reach out to shareholders

By Lisa Kerner

Charlotte, N.C., June 26 - The Committee of Concerned Shareholders of the Children's Place asked fellow shareholders to support the election of its three nominees at the annual meeting of Children's Place Retail Stores, Inc. on July 31.

Nominated by the shareholder group for election are:

• Raphael Benaroya, chairman of the board of directors of Russ Berrie & Co., Inc.;

• Jeremy J. Fingerman, founder and managing principal of Clairmont Ventures; and

• Ross B. Glickman, chairman of the board and chief executive officer of Urban Retail Properties, LLC.

The shareholder group is led by the company's former CEO, Ezra Dabah, and has a collective 22% stake in the company.

In a letter to shareholders on Friday, the committee said it believes that "the current board lacks certain core competencies, experience and vision that are necessary to protect your investment and enhance the company's growth prospects."

The shareholder group blames the board and interim leadership of Children's Place for the company's "recent weak results."

Children's Place's stock price has decreased 28% since the beginning of June and the company's same-store sales have declined in all but one month since November 2008, the letter said.

Charles Crovitz, the company's interim CEO, "lacks the very qualities that the current board has acknowledged it is looking for in a permanent CEO," the shareholder letter said.

Crovitz, according to the committee, has no public company CEO experience and also lacks product development, merchandising, marketing and real estate experience. He received compensation of nearly $4 million in 2008, the letter said.

Children's Place board nominee Sally Kasaks was recently replaced as chairman and CEO of Pacific Sunwear of California Inc. after "overseeing an almost 84% decline in the company's stock price."

Norman Matthews, recently appointed to the Children's Place board, has held directorships at several companies that have filed for bankruptcy or been liquidated. The 76-year-old Matthews last held a full-time management position in a public company in 1988, the shareholder group said.

Children's Place last nominee for election, Malcom Elvey, has limited retail company experience, said the letter.

CEO reacts

Crovitz fired back at Dabah's group in his own letter to the company's shareholders on Friday, reminding them that Dabah and his father-in-law, Stanley Silverstein, are existing members of the board.

Election of Dabah's three "hand-picked nominees" would result in five of the nine members of the company's board being "Mr. Dabah's personal designees," Crovitz said.

According to Crovitz, Dabah was forced to resign as CEO of Children's Place in September 2007 after the company's auditor at the time, Deloitte & Touche, said it was no longer willing to rely on Dabah's representations in connection with its audits.

Since Dabah resigned, Crovitz said the Secaucus, N.J., specialty retailer has been "revitalized" and is "positioned as a leading value-oriented specialty retailer of children's apparel and accessories."

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