Risk & Compliance

Internal Probe Stalls Children’s Place Filings

The retailer misses another filing deadline as it investigates the behavior of two executives accused of violating its policies.
Stephen TaubAugust 31, 2007

The Children’s Place Retail Stores has missed another regulatory-filing deadline as it probes violations of its company policies by two executives. The company had originally said it would release a number of delinquent financial reports on Friday.

The missed filings include its annual report for the fiscal year ended February 3, 2007, and quarterly reports for the second and third quarters of fiscal 2006 and first quarter of fiscal 2007. In a Friday regulatory filing, the company reiterated its August 23 explanation that recent developments have required it to address matters it had not anticipated.

Indeed, the company’s board of directors is still reviewing the circumstances surrounding certain violations of the company’s policies and procedures by two executives of the company, and is considering whether to take action. The company has not named the executives or given details on the violations.

Children’s Place does not expect these violations to result in a material change to previously reported results of operations. However, it did stress that the board must determine how it will deal with these matters before the company files its financial reports with the Securities and Exchange Commission.

The retailer has put off filing its financials several times this year. It said in February that it would restate its financial results by as much as $24 million to account for incorrect measurement dates for stock-option grants. And earlier this month, the company said its work surrounding the accounting for its historical stock-option grants was substantially completed. Children’s Place has also blamed its delayed filings on ongoing discussions with The Walt Disney Co. over breaches in its license agreement.

In Friday’s announcement, the company also said that due to the delay in filing its delinquent reports, it is asking Nasdaq for more time to file them.