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Event Brief of The Children's Place Retail Stores, Inc. Conference Call to Provide Update On Exit of Disney Store North America Business - Final.

Article Excerpt
Original Source: FD (FAIR DISCLOSURE) WIRE

PARTICIPANTS

. Heather Anthony, The Children's Place, IR Contact . Chuck Crovitz, The Children's Place, Interim CEO . Margaret Whitfield, Sterne Agee, Analyst . Sue Riley, The Children's Place, EVP Finance & Administration

. Michael Shrekas, Longacre Research, Analyst . Kimberly Greenberger, Citigroup, Analyst . John Zolidis, Buckingham research, Analyst . Nick Pai, [Lobe], Analyst . Janet Kloppenburg, JJK Research, Analyst

OVERVIEW

PLCE's Hoop subsidiary that operates the Disney Store's North America chain filed Chapter 11 petitions under which Hoop would pursue transfer of a substantial portion of the business to Walt Disney.

PRESENTATION SUMMARY

S1. Business Update (C.C.) 1. Highlights: 1. PLCE's Hoop subsidiary that operates the Disney Store's North America chain filed Chapter 11 petitions under which Hoop would pursue transfer of a substantial portion of the business to Walt Disney. 2. With limited strategic and financial options available under the license agreement that was entered into in 2004, Hoop's Board of Directors determined that pursuing the transfer of a majority of the business back to Disney through a Chapter 11 case is the best way to complete an orderly wind-down of Hoop's affairs. 1. This will maximize return to creditors and Co. hopes it will enable a substantial portion of the chain to continue operating. 3. This action is completely consistent with last week's announcement when PLCE stated: 1. Co. had decided to exit the Disney North American business. 2. Co. was in advanced discussions with Walt Disney. 3. Co. was pursuing alternatives to implement an exit from the business. 4. The bankruptcy action is specific to Hoop only. 1. PLCE is not filing a Chapter 11 case. 5. If PLCE is able to complete the transaction as currently envisioned and it receives court approval, Co. will be released from future claims and liabilities that Disney may have against the Co.

6. Co. continues to expect pretax cash exit cost to be within the

previously stated range of $50-100m. 7. Assuming the agreement with Disney is finalized as is currently contemplated, Co. will provide transitional services such as IT and logistics for the next 3-6 months. 8. Number of stores Disney will take under the proposed transaction is not determined. 1. Co. expects it to be approx. two-thirds of the stores. 9. If the proposed transfer of the Disney Store business back to Disney is approved by the bankruptcy court, under the current terms of the agreement being negotiated, will be concluded by April 30, Hoop will be responsible for the wind-down of the stores up until April 30 and Walt Disney will take over...

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