| Children's Place Retail Stores, Inc., The | |||
| Ticker: | PLCE | One Dodge Drive | |
| Exchange: | NASDAQ-National Market | West Caldwell, NJ 07006 | |
| Industry: | Retail (SIC Code 5641) | (973) 227-8900 | |
| Type of Shares: | Common Shares | Filing Date: | 7/18/97 | |
| U.S. Shares: | 4,000,000 | Offer Date: | 9/18/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $13.00 - $15.00 | |
| Primary Shares: | 4,000,000 | Offer Price: | $14.00 | |
| Secondary Shares: | 0 | Gross Spread: | ||
| Offering Amount: | $56,000,000 | Selling: | ||
| Expenses: | - | Reallowance: | ||
| Shares Out After: | - |
| Manager | Tier | Phone |
| Montgomery Securities | Lead Manager | (415) 627-2100 |
| Donaldson, Lufkin & Jenrette Securities Corp. | Co-manager | (212) 371-0641 |
| Legg Mason Wood Walker, Inc. | Co-manager | (410) 539-4038 |
| Smith Barney Inc. | Co-manager | (212) 723-7300 |
| Issuer's Law Firm: | Stroock & Stroock & Lavan |
| Bank's Law Firm: | Hale and Dorr |
| Auditor: | Arthur Andersen |
Dollar amounts in U.S. millions except for per share data | |||||
| 3 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 2/1/97 | 5/3/97 | 5/4/97 | 5/3/97 | ||
| Revenue: | $143.84 | $39.20 | $30.44 | Assets: | $64.48 |
| Net Income: | $30.44 | $1.01 | $0.64 | Curr Assets: | |
| EPS: | $1.27 | $0.04 | Liabilities: | $37.18 | |
| Prior EPS: | $1.36 | $1.07 | Curr Liabilities: | ||
| Cash Flow/Oper: | $7.85 | Equity: | $27.30 | ||
| Cash Flow/Fin: | Cash: | ||||
| Cash Flow/Inv: | |||||
| Business Description |
| The company is a leading specialty retailer of high quality, value-added apparel and accessories for newborn to twelve year old children. The company designs, contracts to manufacture and sells its products under "The Children's Place" brand name. As of July 17, 1997, the Company operated 130 stores, primarily located in regional shopping malls in the eastern half of the United States. The Company's net sales have increased from $96.6 million in fiscal 1993 to $143.8 million in fiscal 1996 and operating income has increased from $1.1 million in fiscal 1993 to $13.3 million in fiscal 1996. In the first quarter of fiscal 1997, net sales totaled $39.2 million as compared to $30.4 million in the first quarter of fiscal 1996. The Company has achieved comparable store sales increases over prior years of 13.0%, 10.0% and 8.6% during fiscal 1994, 1995 and 1996, respectively, and 5.0% in the first quarter of fiscal 1997. Net sales per gross square foot have increased from $226 in fiscal 1993 to $335 in fiscal 1996. These increases are primarily the result of a merchandising and operational repositioning of the Company over the last five fiscal years under the direction of the Company's current anagement team.In July 1996, following a private financing in which the Company raised $37.4 million of net proceeds, the Company began to implement an aggressive growth strategy designed to capitalize on its business strengths and its strong store economics. From July 1, 1996 through the end of fiscal 1996, the Company opened a total of 16 new stores, growing to 108 stores. During fiscal 1997 through July 17, 1997, the Company has opened 22 stores. The Company intends to continue its expansion program and currently plans to open approximately 25 additional stores during the remainder of fiscal 1997 and at least 60 stores in fiscal 1998. |
| Competition |
| The children's apparel retail business is highly competitive. The Company competes in substantially all of its markets with GapKids, BabyGap and Old Navy (each of which is a division of The Gap, Inc.), The Gymboree Corporation, Limited Too (a division of The Limited, Inc.), J.C. Penney Company, Inc., Sears, Roebuck and Co. and other department stores that sell children's apparel and accessories, as well as certain discount stores such as Wal-Mart Stores, Inc. and Kids "R" Us (a division of Toys "R" Us, Inc.). The Company also competes with a wide variety of local and regional specialty stores and with other national retail chains and catalog companies. One or more of its competitors are present in substantially all of the malls in which the Company has stores. Many of the Company's competitors are larger than the Company and have access to significantly greater financial, marketing and other resources than the Company. There can be no assurance that the Company will be able to compete successfully against existing or future competition. |
| Business Plan |
| The company believes that its value-based, proprietary brand business strategy has been and will continue to be the key to its success as a specialty retailer. The following strengths have contributed to the success of the company's merchandising and operating strategies: (I) Unique Price-Value Positioning, (ii) Merchandising Stretegy, (iii) Strong Brand Imange, (iv) Broad Consumer Appeal, (v) Vertically Integrated Operations, (vi) Expert Sourcing and (vii) Proven Management Team. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to repay the company's 12% Senior Subordinated Notes, to repurchase a portion of the company's outstanding warrants, to reduce outstanding borrowings under the company's revolving credit facility, and for working capital and other general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| Ezra Dabah | 48.40% | |
| Thomas A. Saunders III | 37.50% | |
| The SK Equity Fund, L.P. | 37.50% | |
| SK Investment Fund, L.P. | 37.50% | |
| John F. Megrue | 37.50% | |
| Christopher K. Reilly | 37.50% | |
| Allan W. Karp | 37.50% | |
| Stanley Silverstein | 30.60% | |
| Nomura Holding America Inc. | 8.90% |
| Officer Name | Title | Age |
| Ezra Dabah | Chairman of the Board of Directors and Chief Executive Officer | 43 |
| Stanley B. Silver | President, Chief Operating Officer and Director | 59 |
| Nina L. Miner | Vice President - Design and Product Development | 48 |
| Salvatore W. Pepitone | Vice President - Distribution Center | 50 |
| Ed DeMartino | Vice President - Management Information Systems | 46 |
| Diane M. Timbanard | Vice President - Merchandising Manager | 52 |
| Robert Finkelstein | Vice President - Merchandising Planning and Allocation | 45 |
| Mario A. Ciampi | Vice President - Real Estate & Construction | 37 |
| Mark L. Rose | Vice President - Sourcing and Production | 32 |
| Susan F. Schiller | Vice President - Store Operations | 36 |
| Seth L. Udasin | Vice President, Chief Financial Officer and Treasurer | 41 |
| Steven Balasiano | Vice President, General Counsel and Secretary | 34 |