Children’s Place, investors trade shots

Secaucus, N.J. – The Children’s Place Inc. and a group of dissatisfied activist Children’s Place investors, called Shareholders for Change at the Children’s Place, have exchanged accusations in a pair of open letters to shareholders. The retailer struck first with a letter supporting the election of its three independent board nominees, including chairman Norman Matthews, at the upcoming May 22 annual meeting.



“Our recently announced excellent first quarter financial results demonstrate that we are continuing the strong momentum we generated in fiscal 2014 by successfully implementing our transformation plan, including achieving four consecutive quarters of positive comparative store sales,” says the letter. “Additionally, we have significantly increased our gross margin, far exceeded the prior year’s EPS, increased our adjusted guidance for fiscal 2015 and returned another $43 million of capital to shareholders in the first quarter. As a result, our stock is currently trading at an eight-year high.”



The letter goes on to say the dissidents’ competing board nominees would “disrupt” the ongoing transformation and that the dissidents’ claims of poor performance and dishonesty from the current board is incorrect.



A few hours later, Shareholders for Change at the Children’s Place issued an open letter in response. The group is led by Macellum Advisors GP LLC and Barington Capital Group L.P., who collectively own about 2% of The Children’s Place’s shares. The letter accuses the current board of “prolonged underperformance” and making misleading statements.



“We believe that The Children’s Place has severely underperformed its publicly traded peer Carter’s Inc. as well as the S&P retail and specialty retail indexes while the board has failed to take any action to hold management accountable for the company’s underperformance,” says the letter.