Shareholders to vote this week on chain’s future
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On Friday, shareholders will get the chance to vote on who will control Children's Place Retail Stores Inc., deciding whether the company remains a specialty apparel chain or expands to a big-box concept.
According to The Wall Street Journal, the battle over ownership has been brewing for two years between the board and former ceo Ezra Dabah, who is the company’s biggest shareholder. In September 2007, Dabah resigned at the request of the board after failing to disclose his wife's inheritance of company stock. Board member Charles Crovitz has been serving as interim chief executive of Children’s Place since Dabah's departure in 2007.
Three seats on the company’s nine-person board are at stake in the proxy fight. The company has nominated incumbents to remain in place and continue Children's Place on a path of moderate expansion in children's clothing and accessories, while Dabah has his own list of nominees and the proposal to turn the chain into a big-box retailer offering a range of children's products, including furniture and toys.
The Journal reports that current management says Dabah has nearly ruined the company, while Dabah's group, called the Committee of Concerned Shareholders of the Children's Place, deemed the current board "complacent" and warned it’s putting at risk the company and its growth prospects.
The Children's Place board points to the company's better performance since Dabah's departure as proof otherwise. In fiscal 2008, the company reported net sales grew 7.2 percent.
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