More Management Turmoil at Children's Place

The Children's Place PLCE (NASDAQ) continues to face management unease.  The company's CFO, Richard Paradise, who has been in his job for less than one year, announced he would be leaving August 1, to pursue another business opportunity.  He joined the company back in November 2007.  Paradise joined the firm soon after the company's former CEO and largest shareholder, Ezra Dabah, was pushed out of his job.  

Since the CEO change at the firm back in September 2007, the company has faced a number of  executive changes and growing financial pressures (see earlier blogs). Dabah, despite being out as CEO has taken steps to try and take over the firm.  According to Reuters,

Children's Place has been weighing a possible sale of the company under pressure from its largest shareholder, board member and former Chief Executive Ezra Dabah, who owns a 17 percent stake in the company.

After a difficult period following Dabah's resignation as CEO, the company has managed to stabilize.  Paradise's resignation announcement raises another potential red flag.  Susan Riley, the EVP for Finance and Administration would takeover Paradise's position and would continue to perform her other responsibilities.  

Keep a close eye on the company.

For more:

Just-Style

MarketWatch

Former CEO Children's Place Has Finally Got the Attention of The Firm

Ezra Dabah the former CEO of troubled children's retailer, A Children's Place PLCE (NASDAQ), and its largest shareholder appears to have finally gotten the attention of the public company.  I have been following Dabah's attempts for some time in the blog.  After continuing efforts to get the company to consider Dabah as a possible acquirer of the firm after his initial ouster back in September 2007, the board has finally responded to his requests.  In an Associated Press story by Amanda Fehd in the Atlanta Journal Constitution Fehd wrote,

The board of Children's Place Retail Stores Inc. said Friday it has approved a request from its former chief executive Ezra Dabah to work on a proposal to acquire the company with a private equity firm.

Dabah had asked the board's permission to bypass shareholder acquisition laws that could otherwise preclude Golden Gate Private Equity Inc.'s participation in an offer.

Children's Place continues to struggle in the midst of a difficult retailer environment and a decline in the company's cache as a moderate priced but high styled children's clothing store. Keep a close eye on how this all plays out.

For more:

The Deal.com (May 22 update)

Children's Place is No Children's Fight

Ezra Dabah who was recently forced to resign as CEO of The Children's Place Retail Stores PLCE (NASDAQ) in a recent 13D filing has indicated he and other interested parties were considering making an offer to acquire the company. Dabah despite giving up his position as CEO remains the largest shareholder of the firm. Last week he began making attempts to clear his name (see earlier blogs). If Dabah can get a real private equity player to back him, he may get his chance to run the firm again and get his revenge.

Stay tuned.

For more see:

Investopedia
CNN Money
Streetinsider.com 13D tracker
Houston Chronicle
TheStreet.com
Reuters

Children's Place ex-CEO Fights Back

Former Children's Place CEO, Ezra Dabah has come out fighting a few weeks after being forced to resign as CEO (see earlier blog). According to an article by Michael Barbaro in today's New York Times,

Mr. Dabah fired off a testy letter last night to the acting chairwoman of Children’s Place, charging that his resignation was “solely attributable to a power play by certain members of the board” and upbraiding the company for making remarks “that have disparaged my good name and reputation.”

The two-page letter, by turns angry and boastful, suggests that a nasty behind-the-scenes battle played out at the company over Mr. Dabah’s conduct, resulting in a split board vote on whether he should remain in the job.

As the stock has gone into a tailspin and rumors continue about a possible sale of the company, Dabah, who remains the largest shareholder, has succeeded in muddying the waters surrounding the firm even further. Dabah insists,

... he is innocent of any wrongdoing, that the board and he "mutually agreed" that he would resign and that his resignation "was without cause."

This story has legs and will continue for some time.

For more on the story see:

Bloomberg Update 3
Crains
Reuters
NY Times Dealbook

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?

For more:

NJ Record
CNN Money
Prime Newswire
Wall Street Journal (reg. req.)
MSN Money
BusinessWeek
RTT News