Shareholders of The Children's Place Retail Stores, Inc. on Tuesday filed a class action suit against the retailer, claiming that it "failed to disclose and misrepresented" details of its licensing agreement with Disney over the operation of 331 Disney Stores. The shareholders are represented by the law firm of Schiffrin Barroway Topaz & Kessler, LLP.
At the heart of the suit is shareholder dissatisfaction with The Children's Place's inability to meet obligations to Disney to maintain store standards. In June, The Children's Place announced they would remodel or "refresh" the majority of its Disney Stores at a cost of $175 million to comply with contractual requirements. In August, however, they announced they'd be unable to meet many of the deadlines established in the June agreement, thus leaving the door open for Disney to grant sales rights to other retailers or to cancel the licensing agreement outright.
This week, The Children's Place announced that overall September 2007 same store sales decreased 4% from the same period last year. Sales from The Disney Store alone decreased 6%.
Shares of The Children's Place have dropped nearly 40 points since the beginning of the year. As of this post, it's priced at $22.65/share.
Source: CNNMoney/PR Newswire
At the heart of the suit is shareholder dissatisfaction with The Children's Place's inability to meet obligations to Disney to maintain store standards. In June, The Children's Place announced they would remodel or "refresh" the majority of its Disney Stores at a cost of $175 million to comply with contractual requirements. In August, however, they announced they'd be unable to meet many of the deadlines established in the June agreement, thus leaving the door open for Disney to grant sales rights to other retailers or to cancel the licensing agreement outright.
This week, The Children's Place announced that overall September 2007 same store sales decreased 4% from the same period last year. Sales from The Disney Store alone decreased 6%.
Shares of The Children's Place have dropped nearly 40 points since the beginning of the year. As of this post, it's priced at $22.65/share.
Source: CNNMoney/PR Newswire
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