Children's Place CEO Forced Out

Children's Place Retail Stores PLCE (NASDAQ), the once high flying children's retail chain forced its CEO, Ezra Dabah to resign and named board member Chuck Crovitz as interim CEO. Dabah has served as the company Chairman of the Board since 1989 and Chief Executive Officer since 1991. In a press release the retailer said,

... an investigation found Dabah did not comply with its securities-trading policies. The internal probe also found irregularities in expense reimbursement practices by its chief creative officer. The company said none of the violations have a material affect on its operating results. The company went to say, "in light of Mr. Dabah's resignation and the change in executive roles, the company expects that additional time will be required before the company can complete its overdue Annual Report on Form 10-k for the fiscal year ended February 3, 2007, including its audited financial statements for such year, and its other overdue SEC periodic reports.

The company also announced it will soon engage a search firm to conduct a search for a permanent successor to Dabah. The initial market response to the announcement was very positive. The stock jumped after the announcement. The company still faces, however, a number of major hurdles particularly with regard to the management and approach of the firm. Children's Place has been steadily losing ground to competitors. Can new management make a difference or are the company's problems far more complicated than management alone?

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