Children's Place, Inc. (the) · NASDAQ:PLCE
Children's Place, Inc. (the) — Proxy Contest (May 2015)
39 slides from Children's Place, Inc. (the)'s proxy contest presentation, May 1, 2015
Slide 1: The Children's Place: Executing a Transformation to a Leading Global, Omni-Channel Children's Apparel Brand
The Children’s Place: Executing a Transformation to a Leading Global, Omni-Channel Children’s Apparel Brand May 2015
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward Looking Statements This presentation may contain certain forward-looking statements regarding future circumstances. These forward-looking statements are based upon the Company’s current expectations and assumptions and are subject to various risks and uncertainties that
Slide 3: The Children's Place Today
The Children’s Place Today 2 Financial Overview ($mm) Management Tenure TSR2 (10-Dec-2009 – 14-Apr-2015) • Largest pure play children’s specialty apparel retailer in North America ‒ #1 brand awareness and the highest market share among children’s specialty retailers • 1,097 retail stores with fast g
Slide 4: Delivering Superior Shareholder Value
Delivering Superior Shareholder Value Executing a Higher Growth, Higher Value Strategy Changing market dynamics for kid’s apparel, coupled with historical under investment and failure to adapt, meant The Children’s Place needed a new strategy for success Successfully executing a long-term strategic
Slide 5: Driving a Transformation, Delivering Results
Driving a Transformation, Delivering Results 4 Executing a clearly defined transformation strategy to continue to drive shareholder value Outperformed the market and peers since Jane Elfers was announced, and growing momentum for continued outperformance Stock is currently near an eight-year high, r
Slide 6: Agenda
Agenda 5 II. Through the Transformation, Record of Delivering Value to Shareholders I. TCP Strategy for Transforming the Company to a Global Omni-Channel Brand III. Highly Qualified Board and Enhanced Corporate Governance V. Concluding Remarks IV. Macellum / Barington Proxy Fight
Slide 7: Market Trends in Children's Specialty Apparel Meant The Children's Place Needed to Adapt
17,734 20,145 2009 2013 # of US Stores (Retailers with Children’s Departments) Market Trends In Children’s Specialty Apparel Meant The Children’s Place Needed to Adapt Over 2,400 Stores Added… Kid’s Apparel Has Become More Competitive Source: NDC, NPD and Company filings 6 Specialty Retailers Retail
Slide 8: In 2010, Children's Place Announced a New Strategy Well Received by the Marketplace
In 2010, Children’s Place Announced a New Strategy that Was Well Received by the Marketplace 7 “After meeting new president and CEO Jane Elfers, we have a higher degree of confidence PLCE can further penetrate the children’s value apparel market. Ms. Elfers’s cross functional style of managing and b
Slide 9: Progress Towards Becoming a Global Omni-Channel Children's Brand
Channel Expansion We Are Making Significant Progress Towards Our Goal of Becoming a Global Omni-Channel Children’s Brand Talent 8 Operational Excellence Product Focus Transforming Business through Technology Fleet Optimization 1 2 3 4
Slide 10: Transforming Our Product Offering in Every Division and Category
Transforming Our Product Offering in Every Division and Category 9 • Immediate focus in 2010 on consistent product execution across all divisions • Immediate focus in 2010 on big kids (size 4- 14) opportunity based on upcoming demographic shifts • Ensure in-stock positions on key item year round bas
Slide 11: Business Transformation Through Technology
Business Transformation Through Technology 10 •We are in the third year of a five-year plan of a company-wide transformation of our technology and systems •Our technology initiatives are strengthening our inventory management capabilities including planning, allocation and replenishment. Global sour
Slide 12: Global Growth Through Alternate Channels of Distribution
$119 $151 $176 $215 $246 $280 7% 9% 10% 12% 14% 16% FY09FY10FY11FY12FY13FY14E-Commerce Revenue ($mm)% of Total RevenueGlobal Growth Through Alternate Channels of Distribution 11 •E-Commerce has grown at an 18.5% CAGR since 2009 ‒16% of total sales in fiscal 2014 •Launched a Canadian e-commerce site
Slide 13: Store Fleet Optimization in North America
Store Fleet Optimization in North America 12 Fleet Facts 1,097 Stores in North America Brand Performs Well Across Variety of Formats United States 88% Canada 12% Premium Malls 56% Value Centers & Small Markets Outlets 12% Street/Strip/Other 8% 24% 4 • Developed a new store prototype in 2010 with sig
Slide 14: Agenda
Agenda 13 I. TCP Strategy for Transforming the Company to a Global Omni-Channel Brand II. Through the Transformation, Record of Delivering Value to Shareholders III. Highly Qualified Board and Enhanced Corporate Governance V. Concluding Remarks IV. Macellum / Barington Proxy Fight
Slide 15: Maintaining Leading Market Share In an Increasingly Competitive Environment
Maintaining Leading Market Share In an Increasingly Competitive Environment Source: Market share data from NPD Group, Company filings Note: Same-store-sale figures are based off the latest fiscal year available. Ascena same-store sales for Q42014. Top Quartile Sales Performance in 2014 … Maintaining
Slide 16: Carter's Is Not a Close Operating Peer
Baby (Ages 0-2) 35 % Other 65 % Carter’s Is Not a Close Operating Peer Source: Market share data from NPD Group, Company filings Note: Oshkosh figures are for Oshkosh retail 1 Numbers shown for FY14 are based off of latest LTM data available as of Jan-2015 for Justice. 2 Oshkosh retail operating mar
Slide 17: Stock Price Is Up 114% Since Jane Elfers' Appointment
Stock Price Is Up 114% Since Jane Elfers’ Appointment… Source: Press releases, Factiva and Bloomberg; Market data as of 14-Apr-2015 Stock Price Is Near Its 8-Year High 16 New Strategy & Leadership Transformation into Global, Omni-Channel Brand Delivering Returns $29.07 $0 $10 $20 $30 $40 $50 $60 $70
Slide 18: Has Outperformed Peers and S&P Indexed Stock Price
…And Has Outperformed Peers and S&P 500 Indexed Stock Price Since 10-Dec-20091 Total Shareholder Return Over Time of CEO Tenure 2010 2011 2012 2013 2014 2015YTD Since 12/10/09¹ Children’s Place 50.4 % 7.0 % (16.6)% 28.6 % 0.1 % 9.3 % 114.2 % Specialty Retail Peers² 24.4 (2.3) 31.2 0.7 (12.7) 9.0 71.
Slide 19: Prudent and Balanced Approach to Allocation of Capital
52 % 55 % 48 % 38 % 10 % 34 % 2 % 6 % 17 % 11 % 7 % 18 % 49 % 25 % 28 % 31 % 34 % 45 % 45 % 51 % 65 % 66 % 70 % 94 % 100 % Repurchase Dividends Capex Source: Company filings and Capital IQ Note: Above is sorted based off of sum of stock repurchases and dividends. Allocation of Capital Spend Over Las
Slide 20: Significant Return of Capital to Shareholders
Successful Execution of Our Strategy Has Enabled Significant Return of Capital to Shareholders • Prudent cash flow management has allowed us to consistently reward shareholders over the last 5 years ‒ We have purchased over $481 million of our common stock since the Board authorized the capital retu
Slide 21: Strategic Transformation and Operating Momentum Positions Company for Success
Strategic Transformation and Continued Operating Momentum Positions The Children’s Place for Success 20 “For longer-term investors that can look into the 2H of 2015 and 2016, we do see a pathway to margin expansion from mid-single digits into the mid-to-high single digit zone over the next couple of
Slide 22: Agenda
Agenda 21 I. TCP Strategy for Transforming the Company to a Global Omni-Channel Brand II. Through the Transformation, Record of Delivering Value to Shareholders III. Highly Qualified Board and Enhanced Corporate Governance V. Concluding Remarks IV. Macellum / Barington Proxy Fight
Slide 23: Strong Record of Corporate Governance
Strong Record of Corporate Governance Strong Record of Corporate Governance Independent Leadership and Oversight •7 of 8 Directors are independent •Five new Directors added since 2011, including two in 2014 Executive Compensation Built Upon Shareholder Feedback •Redesigned long-term incentive plan •
Slide 24: Executive Compensation Policy Closely Aligned With Performance
= Performance-Based (PRSUs + Bonus) Majority of 2014 Compensation Performance-Based CEO compensation in fiscal 2014 was in-line with Peer Group’s1 CEOs and our other NEOs Alignment of compensation and performance—CEO compensation in fiscal 2014 was aligned with TSR performance – 1 year TSR was in th
Slide 25: Highly-Qualified Board with the Right Mix of Experience
Highly-Qualified Board with the Right Mix of Experience •Balanced Mix of Long-Term and Fresh Perspective –Average tenure is 3.75 years –Two new Board members added in 2014 –All Directors other than the CEO are independent •Majority of Board members possess significant retail / operating / finance ex
Slide 26: The Children's Place Board of Directors
Norman Matthews – Chairman The Children’s Place Board of Directors Age: 82 Director since 2009; Independent Member of the Compensation Committee and Nominating and Corporate Governance Committee Former President of Federated Department Stores (1987-1988) Other Directorships: Henry Schein (2002-curre
Slide 27: Two New Directors Joined the Board in 2014
Stanley W. Reynolds Susan Sobbott •Age: 50 •Independent Director since 04-Nov-2014 •Member of Audit Committee •Joined 7-Eleven in 1977; served as CFO since 2005 •Qualifies as an “audit committee financial expert” under SEC rules Biography and Qualifications Two New Directors Joined the Board in 2014
Slide 28: Agenda
Agenda 27 I. TCP Strategy for Transforming the Company to a Global Omni-Channel Brand II. Through the Transformation, Record of Delivering Value to Shareholders III. Highly Qualified Board and Enhanced Corporate Governance V. Concluding Remarks IV. Macellum / Barington Proxy Fight
Slide 29: Macellum & Barington Have Not Sought Constructive Engagement
Macellum & Barington Have Not Sought to Have Constructive Engagement with The Children’s Place Rather, Macellum & Barington have sought to use public attacks and threats to press their agenda 22-Jul: Investor phone call with Barington; no concerns raised 17-Dec: Investor phone call with Macellum; no
Slide 30: Macellum & Barington's Platform Based on Misrepresentations and Misleading Analyses
Macellum & Barington’s Platform is Based on Misrepresentations and Misleading Analyses 29 ×Company’s stock price has significantly underperformed its peers Stock is up over 100% and has outperformed specialty retail peers and S&P 500 since Jane Elfers joined the Company1 Is trading near its 8-year h
Slide 31: Macellum & Barington's Platform Based on Misrepresentations (continued)
Macellum & Barington’s Platform is Based on Misrepresentations and Misleading Analyses 30 The Facts Macellum & Barington Myths ×The Company has made merchandising mistakes Company developed long-term strategic plan to transform the Company into a leading global, omni-channel children’s apparel brand
Slide 32: Macellum & Barington's Platform Based on Misrepresentations (continued)
Macellum & Barington’s Platform is Based on Misrepresentations and Misleading Analyses 31 The Facts Macellum & Barington Myths ×High management turnover When Jane joined, the Company lacked effective leadership, had no guiding strategy, and inventory management, financial systems and supply chain te
Slide 33: Macellum & Barington's Preliminary Proxy Is Inaccurate
In addition, Macellum & Barington’s Preliminary Proxy Is Inaccurate 32 ×Jane Elfers’ total compensation over the last three years was $42.6 million False; the aggregate compensation listed for Ms. Elfers (the $42.6 million referenced) covers a four-year period, not a three-year period Fails to refer
Slide 34: Macellum & Barington's Preliminary Proxy Is Inaccurate (continued)
In addition, Macellum & Barington’s Preliminary Proxy Is Inaccurate 33 ×Since 2010, the Company is on its fourth CFO Although factually correct, it is a misleading statement The incumbent CFO was replaced upon Ms. Elfers’ appointment as CEO and its newest CFO, Anurup Pruthi, was appointed upon the p
Slide 35: Macellum & Barington Seek to Remove Strong Leaders with Critical Skills
Macellum & Barington Seek to Remove Strong Leaders with Critical Skills Macellum & Barington Are Targeting Directors with Significant Leadership Roles, Committee Responsibilities, and Skills Critical to Company’s Transformation 34 Norman Matthews Stanley W. Reynolds Strong Management and Board Exper
Slide 36: Macellum & Barington's Nominees Offer No Differentiated Value
Macellum & Barington’s Nominees Offer No Differentiated Value to The Children’s Place Board 35 ×CEO of Pacific Sunwear from April 2005 to September 2006, during Mr. Johnson’s tenure Pacific Sunwear significantly underperformed with shares declining ~45% from April 2005 – Oct 2006 ×After Mr. Johnson
Slide 37: Agenda
Agenda 36 I. TCP Strategy for Transforming the Company to a Global Omni-Channel Brand II. Through the Transformation, Record of Delivering Value to Shareholders III. Highly Qualified Board and Enhanced Corporate Governance V. Concluding Remarks IV. Macellum / Barington Proxy Fight
Slide 38: Driving a Transformation, Delivering Results
Driving a Transformation, Delivering Results 37 Executing a clearly defined transformation strategy to continue to drive shareholder value Outperformed the market and peers since Jane Elfers was announced, and growing momentum for continued outperformance Stock is currently near an eight-year high,
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