SEC Comment Letter for Childrens Place, Inc. (PLCE) (CIK 0001041859) (PLCE) — Apr 29, 2015
Childrens Place, Inc. (PLCE) (CIK 0001041859)
Date: April 29, 2015 · CIK: 0001041859 · Accession: 0000000000-15-023705
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-23071
Letter
April 28, 201 5 Via E -mail Jonathan Duskin Chief Executive Officer and Portfolio Manager Macellum Capital Management LLC 1270 Avenue of the Americas New York , New York 10020
Re: The Children’s Place , Inc. Preliminary Proxy S tatement filed on Schedule 14A PREC 14A dated April 23rd, 201 5 by Macellum Capital Management LLC et al. File N umber: 000-23071
Dear Mr. Duskin ,
We have reviewed the above -captioned filing, and have the following comments. Some of our comments may ask for additional information to be provided so that we may better understand the disclosure.
Please respond to this letter by amending the Schedule 14A or by providing the requested information . If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.
After reviewing any amend ed filing and any information you provide in response to these comments, we may have additional comments.
PREC 14A fi ling made on April 23, 2015
Letter to Stockholders
1. Rule 14a -6(d) requires that the preliminary p roxy statement contain a statement indicating the estimated release date of the definitive proxy statement to security holders. At present, this statement appears at the bottom of the cover letter to stockho lders as distinguished from the preliminary proxy statement itself as defined at Rule 14a -101. Please revise or advise.
2. Please provide us with suppor t for the assertion s that the participants attempted “to work constructively with the Company ” and that “the Com pany advanced the date of the Annual Meeting. ” Alternatively, please delete the assertions.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting , page 2
3. We noticed that the proxy statement and other soliciting material will be available at a dedicated website. Please advis e us whether or not the participants are relying upon Rule 14a-16 to distribute the proxy statement electronically as the primary means of fulfilling their
Macellum c/o Mr. Jonathan Duskin April 28, 2015 P a g e | 2
obligations under Rule 14a -3(a) and Rule 14a -4(f). If so, please summarize for us how compliance wi th Rule 14a -16 has been effectuated.
Reasons for the Solicitation, page 6
4. Disclose the analysis in support of the belief that the registrant can more than double its earnings per share within the next three years compared to the consensus estimate for fiscal 2014 of $3.04 per share . Refer to SEC Release 34 -16833 (May 23, 1980) .
5. Disclose the factual bases in support of the followi ng two assertions regarding the registrant: “is carrying 44% more inventory on a comparable sales level in the fourth quarter of 2014 than it di d in the fourth quarter of 2010 ;” and “the Company’s poor inventory management is costing the Company an estimated additional $65 to $75 million of working capital .”
6. Given the number of retail store closures completed by the registrant since 2010, and plan to close additional stores through 20 17, please advise us how the registrant was “accelerating store growth. ” In addition, please provide us with support for the statement that many retailers were migrating sales operations to the internet of stores and shrin king “footprints. ”
7. Refer to the following statement: “We find it remarkabl e that Ms. Elfers’ total compensation over the last three years was $42.6 million, which, for comparison, was $12.7 million, or 43%, greater than that of the CEO of Carter’s, Inc …” Revise to disclose, if true, that the $42.6 million cited covers a four year period, not a three year p eriod. In addition, please include qualifying disclosure that explains, if true, that the participants ’ quoted return assumes a calendar year and not a fiscal year as the relevant benchmark for time h orizon .
Election of Directors , page 1 1
8. Notwithstanding the disclosure that the successful election of the participants ’ nominees to the Board will not result in a change to the majority of the Board of Directors, please revise to state t he limitations upon the nominees, if elected, to effectuate future Board action.
9. We noticed that one of the participants ’ nominees, Mr. Johnson, serves as a director of Tilly’s, Inc. Given that Tilly ’s is one of the registrant ’s comp etitors , advise us whether a potential conflict of interest exists and should be disclosed pursuant to Item 5(b )(1) of Schedule 14A. In addition, advise us, with a view toward revised disclosure, whether Mr. Johnson ’s service to Tilly ’s, in combination with a successful election to the r egistrant ’s Board of Directors , could result in a potential violation of Section 8 of the C layton Act .
10. We noticed the disclosure that indicates the shares of common stock represented by the proxy card will be voted for substitute n ominees contingent upon a named nominee being unable to serve and other conditions being satisfied. To the extent that any substitute nominees wo uld need to be identified in a notice given to the issuer in order to satisfy its advanced notice requirement, and such deadline has passed, please revise the disclosure to remove the implication the voting for substitute nominees is a viable option.
Macellum c/o Mr. Jonathan Duskin April 28, 2015 P a g e | 3
11. Participation in a group, as regulated under Section 13(d)(3), alone and without more, does not result in a group member being deemed to beneficially own another group member ’s shares. To the contrary, Rule 13d -5(b) of Regulation 13D -G operates to deem a group to have acquired the beneficial ownership of each of its member s. Please revise to dis close the basis for one group member potentially being deemed to own another group member ’s shares, as stated on page 12, or delete the reference, including the disclaimer.
Solicitation of Proxies, page 17
12. Item 4(b) of Schedule 14A requires disclosure of costs “in connection with the solicitation.” Instruction 1 to this requirement indicates that such costs include “fees for attorneys…and other costs incidental to the solicitation.” Advise us, with a view towards disclosure, whether the legal and attorney fees being paid have been included within the estimated costs associated with this solicitation and the extent to which such all other costs specified in the item and instruction have been or will be disclo sed. At present, the disclosure implies that only a narrow description of solicitation costs have been disclosed.
Additional Participant Information, page 17
13. The disclosure indicates that the members of Shareho lders for Change at the registrant are participants in the solicita tion. Please revise to specify the identities of such member s. Refer to Item 4(b)(1) of Schedule 14A.
Incorporation by Reference, page 20
14. We n oticed the participants’ statement that they have omitted certain disclosures requir ed by law otherwise included in the registrant ’s proxy statement. Please revise to provide a clearer and unambiguous reference to the fact t hat the participants will by relying upon the issuer’s proxy statement to communicate certain information the participants are otherwise required to disclose , and specify the exact information to be referenced . Refer to Rule 14a -5(c).
Form of Proxy
15. We noticed the disclosures relating to the fact that an executed proxy specifically empower s the proxy holders to vote in their discretion on “any other matter s that may properly come before the Annual M eeting .” Please qualify the scope of such discretionary authority granted by citing to Rule 14a -4(c)(3) as done on page 20 .
Closing Comments
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the participants in the solicitation are in possession of all facts relating to the disclosure presented in the above -captioned filing , they are responsible for the accuracy and adequacy of the disclosures they have made.
Macellum c/o Mr. Jonathan Duskin April 28, 2015 P a g e | 4
In respondi ng to our comments, please provide a written statement from each of the participants acknowledging that:
• the participant is responsible for the adequacy and accuracy of the disclosure in the filing;
• staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
• the participant may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
You may contact me at (202) 551 -3266 should you have any questions.
Sincerely,
/s/ Nicholas P. Panos
Show Raw Text
April 28, 201 5
Via E -mail
Jonathan Duskin
Chief Executive Officer and Portfolio Manager
Macellum Capital Management LLC
1270 Avenue of the Americas
New York , New York 10020
Re: The Children’s Place , Inc.
Preliminary Proxy S tatement filed on Schedule 14A
PREC 14A dated April 23rd, 201 5 by Macellum Capital Management LLC et al.
File N umber: 000-23071
Dear Mr. Duskin ,
We have reviewed the above -captioned filing, and have the following comments. Some
of our comments may ask for additional information to be provided so that we may better
understand the disclosure.
Please respond to this letter by amending the Schedule 14A or by providing the requested
information . If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing any amend ed filing and any information you provide in response to these
comments, we may have additional comments.
PREC 14A fi ling made on April 23, 2015
Letter to Stockholders
1. Rule 14a -6(d) requires that the preliminary p roxy statement contain a statement indicating
the estimated release date of the definitive proxy statement to security holders. At present,
this statement appears at the bottom of the cover letter to stockho lders as distinguished from
the preliminary proxy statement itself as defined at Rule 14a -101. Please revise or advise.
2. Please provide us with suppor t for the assertion s that the participants attempted “to work
constructively with the Company ” and that “the Com pany advanced the date of the Annual
Meeting. ” Alternatively, please delete the assertions.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting , page 2
3. We noticed that the proxy statement and other soliciting material will be available at a
dedicated website. Please advis e us whether or not the participants are relying upon Rule
14a-16 to distribute the proxy statement electronically as the primary means of fulfilling their
Macellum
c/o Mr. Jonathan Duskin
April 28, 2015
P a g e | 2
obligations under Rule 14a -3(a) and Rule 14a -4(f). If so, please summarize for us how
compliance wi th Rule 14a -16 has been effectuated.
Reasons for the Solicitation, page 6
4. Disclose the analysis in support of the belief that the registrant can more than double its
earnings per share within the next three years compared to the consensus estimate for fiscal
2014 of $3.04 per share . Refer to SEC Release 34 -16833 (May 23, 1980) .
5. Disclose the factual bases in support of the followi ng two assertions regarding the registrant:
“is carrying 44% more inventory on a comparable sales level in the fourth quarter of 2014
than it di d in the fourth quarter of 2010 ;” and “the Company’s poor inventory management is
costing the Company an estimated additional $65 to $75 million of working capital .”
6. Given the number of retail store closures completed by the registrant since 2010, and plan to
close additional stores through 20 17, please advise us how the registrant was “accelerating
store growth. ” In addition, please provide us with support for the statement that many
retailers were migrating sales operations to the internet of stores and shrin king “footprints. ”
7. Refer to the following statement: “We find it remarkabl e that Ms. Elfers’ total compensation
over the last three years was $42.6 million, which, for comparison, was $12.7 million, or
43%, greater than that of the CEO of Carter’s, Inc …” Revise to disclose, if true, that the
$42.6 million cited covers a four year period, not a three year p eriod. In addition, please
include qualifying disclosure that explains, if true, that the participants ’ quoted return
assumes a calendar year and not a fiscal year as the relevant benchmark for time h orizon .
Election of Directors , page 1 1
8. Notwithstanding the disclosure that the successful election of the participants ’ nominees to
the Board will not result in a change to the majority of the Board of Directors, please revise
to state t he limitations upon the nominees, if elected, to effectuate future Board action.
9. We noticed that one of the participants ’ nominees, Mr. Johnson, serves as a director of
Tilly’s, Inc. Given that Tilly ’s is one of the registrant ’s comp etitors , advise us whether a
potential conflict of interest exists and should be disclosed pursuant to Item 5(b )(1) of
Schedule 14A. In addition, advise us, with a view toward revised disclosure, whether Mr.
Johnson ’s service to Tilly ’s, in combination with a successful election to the r egistrant ’s
Board of Directors , could result in a potential violation of Section 8 of the C layton Act .
10. We noticed the disclosure that indicates the shares of common stock represented by the proxy
card will be voted for substitute n ominees contingent upon a named nominee being unable to
serve and other conditions being satisfied. To the extent that any substitute nominees wo uld
need to be identified in a notice given to the issuer in order to satisfy its advanced notice
requirement, and such deadline has passed, please revise the disclosure to remove the
implication the voting for substitute nominees is a viable option.
Macellum
c/o Mr. Jonathan Duskin
April 28, 2015
P a g e | 3
11. Participation in a group, as regulated under Section 13(d)(3), alone and without more, does
not result in a group member being deemed to beneficially own another group member ’s
shares. To the contrary, Rule 13d -5(b) of Regulation 13D -G operates to deem a group to
have acquired the beneficial ownership of each of its member s. Please revise to dis close the
basis for one group member potentially being deemed to own another group member ’s
shares, as stated on page 12, or delete the reference, including the disclaimer.
Solicitation of Proxies, page 17
12. Item 4(b) of Schedule 14A requires disclosure of costs “in connection with the solicitation.”
Instruction 1 to this requirement indicates that such costs include “fees for attorneys…and
other costs incidental to the solicitation.” Advise us, with a view towards disclosure, whether
the legal and attorney fees being paid have been included within the estimated costs
associated with this solicitation and the extent to which such all other costs specified in the
item and instruction have been or will be disclo sed. At present, the disclosure implies that
only a narrow description of solicitation costs have been disclosed.
Additional Participant Information, page 17
13. The disclosure indicates that the members of Shareho lders for Change at the registrant are
participants in the solicita tion. Please revise to specify the identities of such member s.
Refer to Item 4(b)(1) of Schedule 14A.
Incorporation by Reference, page 20
14. We n oticed the participants’ statement that they have omitted certain disclosures requir ed by
law otherwise included in the registrant ’s proxy statement. Please revise to provide a clearer
and unambiguous reference to the fact t hat the participants will by relying upon the issuer’s
proxy statement to communicate certain information the participants are otherwise required
to disclose , and specify the exact information to be referenced . Refer to Rule 14a -5(c).
Form of Proxy
15. We noticed the disclosures relating to the fact that an executed proxy specifically empower s
the proxy holders to vote in their discretion on “any other matter s that may properly come
before the Annual M eeting .” Please qualify the scope of such discretionary authority granted
by citing to Rule 14a -4(c)(3) as done on page 20 .
Closing Comments
We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require. Since the participants in the solicitation are
in possession of all facts relating to the disclosure presented in the above -captioned filing , they
are responsible for the accuracy and adequacy of the disclosures they have made.
Macellum
c/o Mr. Jonathan Duskin
April 28, 2015
P a g e | 4
In respondi ng to our comments, please provide a written statement from each of the
participants acknowledging that:
• the participant is responsible for the adequacy and accuracy of the disclosure in the filing;
• staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and
• the participant may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United States.
You may contact me at (202) 551 -3266 should you have any questions.
Sincerely,
/s/ Nicholas P. Panos
Nicholas P. Panos
Senior Special Counsel
Office of Mergers & Acquisitions
cc: Andrew M. Freedman , Esq.
Megan M Re da, Esq.
Olshan Frome Wolosky LLP