Richard Flaks – Senior Vice President of Planning, Allocation & Information Technology Susan Riley – Executive Vice President of Finance & Administration Charles Crovitz – Interim Chief Executive Officer Heather Anthony Jill Kronenberger

John Morris – Wachovia Capital Markets Andrea for Brian Tunick – J.P. Morgan Kimberly Greenberger – Citigroup Margaret Whitfield – Sterne, Agee & Leach John Roberts – Buckingham Research Janet Kloppenburg – JJK Research Linda Tsai – MKM Partners Michael Shoregast – Long Acre Tom Flanagan – SIG Vick Camar - Sintos Partners Margaret Shipiro – Retail Tracker

Good day and welcome to the Children's Place fourth quarter 2007 earnings conference call. I will now turn the call over to Miss Heather Anthony, please go ahead Ma’am.

Thank you Kevin and good morning everyone, thanks for joining us today for a review of our fourth quarter fiscal 2007 financial results as well as an overview of actions taken resulting from our ongoing strategic review process. Joining us on this morning’s call are Chuck Crovitz, Interim Chief Executive Officer and Sue Riley, Executive Vice President of Finance and Administration. Also on hand to answer your questions at the end of our prepared remarks are Rich Paradise, Senior Vice President and Chief Executive Officer, Richard Flaks, Senior Vice President of Planning, Allocation and IT and Jill Kronenberg, Senior Vice President and General Merchandise Manager of the Children's Place brand. Today Chuck will review our announcements made today and Sue will cover our preliminary financials. We ask that you limit yourself to one question so we can get to as many callers as possible. Before we begin, I would like to remind participants that any forward-looking remarks made today are subject to the safe harbor statement found in this morning’s press release as well as in our Securities and Exchange Commission filings. After our prepared remarks, we will be able to take your questions. With that out of the way, I will now turn the call over to Chuck.

Thank you Heather, good morning everyone, thank you for joining us today. Earlier this morning we reported the fourth quarter and fiscal 2007 financial results and I also provided an update on our ongoing revenue of strategic alternatives. Let me first turn to the specific actions we announced this morning, which is consistent with the priorities we discussed in on third quarter conference call. On that call, we outlined our key go forward priorities the most important being the need to assess our operations and identify near term actions to improve the business. The plans we announced today are the result of that effort. For the last several months, we have conducted deep dive into the business. As part of that review, we have been able to confirm what we have believed and known to be true for many years. The core Children's Place business is strong, viable and while we certainly stumbled on many fronts in 2007, the business is improving. When we look at our performance in 2007, five factors had the greatest impact on our business. Our merchandise did not resonate with customers. Our inventory numbers were too high. Our expense structure and capital spending levels were not reflective of value or into business. We had to operate through a challenging macro economic environment. The structure of the Disney business with high variability and high capital requirements. What we also know is the business as usual is no longer acceptable. In an effort to right our ship and return the Company and the brand to it’s historical levels of productivity, we are compelled to make tough decisions that will enhance our organizational effectiveness. As outlined in our press release, we are embarking on the following four decisive actions. We are exiting the Disney Store’s North America business. We are enhancing the profitability to workforce reductions. We are reducing our planned 2008 capital expenditure budget. We are managing inventory at lower levels appropriate to this environment. Turning to action number one, exiting the Disney Store North America business, as part of the broader review of strategic alternatives, our advisors and we evaluated various strategies to enhance the operating performance and to realize the full potential of the Disney Store North America business. Although a thorough review of the Disney Store operations, it’s potential to deliver earnings and the necessary capital required to meet obligations and the license agreement. We have decided to exit the Disney North American business. Obviously, we have nothing but the upmost respect for the Disney brand and we are proud of what we have accomplished for this business during the time that we have run it. We have built a fantastic team to oversee and run the business. We have upgraded the esthetic of the product throughout the store. Through our expertise in global sourcing, we were able to improve the quality of the merchandise while significantly reducing costs. We entered into the outlet channel, which has been very productive. We launched a highly successful e-commerce site and we developed a unique and compelling new Disney Store prototype that has been very well received by the guests. We opened these first stores in November of 2007 and they have performed very well throughout the holiday season. Unfortunately, while the earnings potential for this division could materialize over time when it’s compared to the capital investment required, the equations simply does not balance out in this environment. Reflecting our decision to exit the business, we took a pretax asset impairment charge of $80.3 million in the fourth quarter. As discussed in this morning’s release, the Company and Hoop are in advanced stage of discussions with the Walt Disney Company regarding the term under which Disney might regain ownership and control of approximately two thirds of the existing stores. Hoop and the Company intend to disclose the arrangement for exiting the Disney North America business in the very near term. In addition to the cost that will be incurred by the Hoop’s subsidiaries in connection with exiting the Disney North America business, at this time the Company expects it may incur pretax cash exit costs in the range of 50 to $100 million payable over a period of time. Turning to action number two, enhancing profitability through workforce reduction, in connection with the review of our expense structure as well as the planned exit of the Disney Store North American operations, we are eliminating approximately 80 current positions from our shared service workforce, which is on top of 50 open positions we have determined not to fill. This results in a reduction in the size of the shared services of approximately 30%. As a result, we expect to realize annualized savings of approximately 12 million pretax, which if you look at 2007 was about 11% of shared service expense. Let me just take a moment and explain that shared services are services such as distribution and information technology and real estate that have serviced both brands. We are talking about just that portion of our overhead. This decision was not entered into lightly. We sincerely regret the impact this will have on some of our associates and we have taken the obvious steps to help mitigate the impact this will have on them. We needed to take this action though in order to streamline operations certainly in light of our becoming a single brand organization once again. Beyond the workforce reduction, we are committed to generating efficiencies that will benefit the Company over time. For example, we will leverage our size, which will benefit our procurement of non-merchandise supplies. We will challenge large areas of spending to insure that we are getting the biggest return for our investment and we will value engineer our stores, which I will speak about in just a moment. Again, these are just a few of the examples of areas that we are going after greater efficiencies in costs. Turning now to review of action three, reducing the plan in 2008 capital expenditure budget. As outlined in today’s press release, we are planning to reduce our ’08 capital spending by more than 60% compared to 2007. The majority of these savings are coming from the exiting of the Disney Store business and our decision to no longer pursue the building we had planned to use as our headquarters. As it relates to store shopper, we must insure that the dollars that we are spending generate the types of returns that we have historically enjoyed. We have a great new prototype for the Children Place which we love; however, the build up has to be more cost effective, which is why the majority of the 30 new stores this year are planned to open in third quarter giving us more time to value engineer them. In addition, we will remodel and refurbish several stores this year and continue to invest in technology particularly the e-commerce site which is enjoying tremendous growth and was up 37% last year. Turning finally to action number four, we began a serious focus on inventory management last fall and we continue to make progress in this area as evidenced by our inventory outlook for the first and second quarter of this year. In short, we are evolving our overall philosophy to simply buy less when compared to last year, which we believe is particularly prudent in this environment. Further, with working with the team, our inventory buys in 2008 are narrower particularly in the second half as compared to ’07 and we have also simplified the assortment variations across the fleet, which has added benefits of creating more efficiency throughout the supply chain and increasing the focus within our stores. Before I turn the call over to Sue, let me reiterate that despite the many distractions and challenging that we endured in 2007, I believe there is tremendous long term opportunity for the Company. We are well positioned in the growing market. The children’s apparel grew at 6% last year approximately three times the rate of the adult apparel and despite our challenges, our market share in 2007 increased by ten basis points. We know that the consumer behavior is shifting towards value, which plays to our favor and while Mom and Dad may cut back on their own spending, they need and want to spend on their children. Our awareness levels are very high; they are on par with Gap Kids and Old Navy. Seventy eight percent of all shoppers are likely to recommend us to a friend. Most importantly, we are returning to our roots, in terms of our merchandising strategy bright color, bright outfitting and great fashion at a tremendous value. With that, we turn this over to Sue for a detailed review of our fourth quarter financial results.

Thank you Chuck and good morning everyone. Before I begin a discussion of our fourth quarter results, I want to remind everyone that financials as shown in last year’s press release were on a preliminary basis and have subsequently been updated as part of our financial restatements. Now moving on to our results. Consolidated net sales for the 13 weeks ended February 2, 2008, increased 4% $670.9 million compared to $645.2 million for the 14 weeks ended February 3, 2007. Fourth quarter sales were comprised of $443.4 million from the Children's Place brand a 6% increase over last year and $227.5 million from Disney Store flat to last year. As a reminder, last year’s fourth quarter had an extra week of sales that totaled $29.5 million. Consolidate comparable store sales increased 3% for the fourth quarter driven by a 2% increase in transactions and a 1% increase in average transaction size. By brand, the Children's Place increased 7% on top of last year’s 2% increase and Disney Stores comparable store sales decreased 4% compared to last years 14% increase. Consolidate gross profit dollars decreased 11% or 640 basis points to $250.5 million. Consolidated gross margin was 37.3% compared to 43.7% last year. The primary driver of the margin decline was higher mark downs at most brands and distribution costs. Further, as we have previously discussed, our holiday inventory levels were high and as such we increased our markdown reserve. Partially offsetting the margin decline was moderate occupancy leverage in both brands. SG&A as a percentage of sales was 30.9% representation a 110 basis points of deleverage. Taking out unusual items from both periods, SG&A as a percentage to sales was 29.4% compared to 28.1% last year. Contributors to the deleverage included royalty and commissions paid to Disney for the e-commerce business that we did not have last year and payroll expense since our volume was higher than last year, partially offset by bonus expense and slightly lower marketing expense as a percentage of sales. Our inability to leverage for both the quarter and the year underscores the importance of the actions we announced today. We recorded a pretax asset impairment charge of $95.3 million, $80.3 million of which is associated with the exit of the Disney Store’s business and 14.8 million which is due to the write down of the building that we had previously planned to use as our corporate headquarters in Secaucus. This compares to last year’s pretax impairment charge of $16.7 million. We recorded other costs of $12 million this year reflecting our decision not to move forward with the previously mentioned headquarters and the exiting of Disney Store’s business. Depreciation and amortization expense increased 40 basis points or 3.4% reflecting our larger store base, new DC and the accelerated deprecation of the Mickey Store’s. We incurred interest expense of $1.2 million versus interest income of $1.6 million last year reflecting our having to borrow against our revolver as most of our cash reserves during the quarter were overseas. Our effective tax rate was 34% in the fourth quarter versus 19% last year. This year’s tax rate reflects the impact of our impairment charge and other costs, which were incurred at a relatively high tax jurisdiction partially offset by the tax impact of our decision to repatriate foreign cash in order to meet the obligations pertaining to our Hoop operating subsidiaries. Last year’s tax rate benefitted from the use of certain foreign tax credits. Our net loss for the quarter was $58.5 million or $2.01 per share compared to net income of $44.7 million or $1.48 per share last year. Excluding unusual items incurred both this year and last year, fourth quarter net income was $20.5 million or $0.70 compared to net income of $52 million or $1.73 per share last year. As a reminder, last year’s extra week contributed $0.04 to the quarter. On a segment basis for the fourth quarter, the Children's Place reported an operating profit of $35 million or 7.9% of net sales well below last year reflecting higher markdowns and the previously mentioned impairment and exit cost. Excluding unusual items, this year and last year, the Children's Place operating margin in the fourth quarter was 13% versus 18% last year again, primarily reflecting higher markdowns year on year. Disney Store reported an operating loss of $92.1 million primarily reflecting the impairment charge as well as accelerated depreciation and exit costs. Excluding unusual items this year and last year, Disney Store’s operating margin in the fourth quarter was approximately flat compared to 12% last year. Shared services reported an operating loss of $29.8 million up 8% or 11% versus last year when excluding one-time items from both periods. Drivers of the increase included amortization of capitalized software, audit fees and store construction. Moving on to the balance sheet, we ended the fourth quarter with cash of $82.1 million compared to cash and investments of $189.7 million last year. Cash changed primarily as a result of our lower operating cash flows driven primarily by lower net income, higher inventory bills and no proceeds from stock exercises that we had last year. We had $89 million of borrowing on our credit facility at quarter end compared to zero borrowings last year. Throughout the quarter, most of our cash reserves were outside of the U.S. We have since repatriated $45 million of cash to meet our obligations under the Hoop licensing agreement. Further, on our balance sheet, we have $36 million of cash characterized as an offset to accounts payable since the cash was in an operating account at year-end. Had this cash been invested at year-end cash and investments would have been $36 million higher and our accounts payable would have been $36 million higher reflecting our higher investment in inventory at year end. Total consolidated inventory was up 19% or 13% on a square foot basis. At the Children's Place inventory at cost was up 9% on a square foot basis, which is below previous guidance while Disney Store’s inventory cost was up 24% or 10% excluding e-commerce, which is above the previous guidance. Consistent with our strategy to lower inventory levels, at the end of the first quarter, we anticipate inventory per square foot at the Children's Place brand to be flat to up in the low single digits. At the end of the second quarter, we anticipate inventory per square foot at the Children's Place brand to be down compared to the prior year. At the end of fiscal 2007, we operated a total of 1,239 stores comprised of 904 Children's Place Stores and approximately 4.3 million square feet and 335 Disney Stores at approximately 1.6 million square feet. Reflecting store openings, we continue to anticipate opening approximately 30 new stores in 2008 and remodeling 17 Children's Place Stores. The majority of our new store openings will fall in the third quarter. Turning to CapEx, 2007 capital expenditures totaled 200 million in line with previous expectations. As announced this morning and as Chuck highlighted, we now expect 2008 capital expenditures in the range of $65 to $75 million below our previously announced level of $150 million. Of the 65 to 75 million, approximately 55 million reflects new store openings, remodels and maintenance and approximately 15 million reflects information technology and other initiatives. The primary drivers of the Company CapEx reduction are the decisions to exit the Disney Store business and to discontinue the construction of the building we had planned to use as our corporate headquarters. As we look ahead, what the environment is currently challenging at this time we anticipate growing sales in the mid single digits in 2008, which will be driven in part by 30 new store openings in the latter part of the year. Selling, general and administrative expense as a percent of sales are anticipated to be flat year over year reflecting the Company’s workforce reduction and other expense reduction initiatives partially offset by the absorption of shared services that the Children's Place will have to absorb as we exit the Disney business. Thanks and now I will turn the call back over to Chuck.

Thank you Sue, operator I think we’d now like to open it up for questions.

: Certainly. (Operator Instructions) Your first call is from the line of Tom Flanagan of SIG. Tom Flanagan – SIG: Thanks, you noticed that exiting of the Disney business at the Walt Disney Company might regain ownership of two thirds of the existing stores, does that imply that one third of the stores are expected to be closed due to maybe cash flow negative performance and if so, are the costs related to that closing embedded in your 50 to $100 million charge, how will you fund that 50 to 100 million charge and can Jill provide an update on spring highlighting successes in merchandising opportunities the balance of the year. That kind of was one question, thanks.

From Disney to spring that’s a great question, Tom. Compliments for that. In terms of the Disney business, I think that we are in discussion as we said with advanced discussions regarding how we transition the stores over to them. In terms of the remaining third, we are going to be exiting those one way or another. We said we are exiting this business; but, the exact way in which that is going to happen is something that we really can’t comment on at this point because we are still active in advanced negotiations. However, we will be able to explain all of this in the near term. I am just going to have to defer that question. Let me turn this over to Jill and let her talk about the more exciting news in spring.

Hi Tom. Tom Flanagan – SIG: Hi Jill.

In spring, we definitely sales a nice turning of the corner happening and even in the past two months we have been feeling that. All the businesses have been feeling good, having some nice successes in each and every one of them, which is nice. We are still cautiously optimistic about the rest of spring with a big shift in Easter. We have to wait and see what that brings to us. Overall, we feel we are very well positioned in a very difficult environment that we are in. Something that we have been talking to and Chuck mentioned in his overview was just our over arching merchandising strategy for the year, which is getting back to our roots, which talks about all the things that define and differentiate us from the competition, which is our great color, our head to toe outfitting, our trend right fashion that we are known for and all at a great value. That is the one over arching theme that we are heading for this year. Tom Flanagan – SIG: Thank you and any response to the funding of the cost related to exiting Disney.

Again Tom, it is premature; we will be getting back to you with more detail. Tom Flanagan – SIG: Thank you very much, best of luck to you.

We will now go on to Kimberly Greenberger, Citigroup please proceed. Kimberly Greenberger - Citigroup: Great, thank you, can you hear me okay?

Yes. Kimberly Greenberger - Citigroup: I am sorry; there was some background noise there. I just want to say first and foremost, congratulations to Jill, Nina and their team for restoring a gem of a business. I think the merchandising direction looks fantastic. In terms of the go forward look at the business, Sue. We are just trying to get a better understanding of how to model the stand-alone business going forward. If you could help us with that shared services bucket for last year, the 107 million. How many of the one time items that you listed in the press release are included in that number just to help us in terms of backing them out. When you say that the SG&A dollars for 2008 are expected to be flat, what is the base dollar amount we should be using off of which to model that?

First with regard to the one-time items that are included in shared service, we have a list of them out. Shared services as reported are $29.8 million. If you take out the specific items that we view as being one time that hit shared services, actually, we did list some of them in the addendum to the press release, you have $2 million on strategic alternatives, 2.3 or so of residual stock option investigation costs. Incremental audit fees of 1.2 million, again primarily in connection with the stock options investigation, the restatements, and then some executive severance of almost a million dollars, about $700,000. That leaves us with about $23.5 million of shared service expense that we are expecting to reduce as we start to realize the savings from this head count reduction year on year. That is the amount that the Children's Place is now going to have to absorb as we think about the Children's Place as a single brand less the amount that we can offset by reducing head count. As to the base for SG&A, you should use this year’s base, take out the one timers this year and then assume that as a percentage of sales in modeling out Children's Place as a stand alone for 2008. I would also like to say with regard to 2008, the Children's Place is the stand alone, once we conclude this Disney issue and exit the stores, we will be providing more clarity as to what we think Children's Place will look like as a stand-alone going forward. Kimberly Greenberger – Citigroup: Could you give us some sort of outlook for how you’re thinking about the cash management here in 2008 and do you think you have sufficient looking capital line of credit to get you through to 3Q and 4Q, which tend to be the quarters when you start building cash back again?

Yes, I would say that with regard to cash management, we are managing our cash much more tightly than we have before. I said in my prepared remarks that we did repatriate cash from overseas and we are deferring the opening of new stores into the latter part of this year. Recognizing that in the second quarter, we generally have experienced our lowest cash position as, we are not generating the top line in the second quarter that we do saying back to school that we are having the buy back to school inventory at that time. I am not going to comment as to whether or not the line is appropriate at this point but I will say that we are managing our cash much more conservatively than what we had in the past and that of course is coupled with significantly more conservative inventory management strategy as well, which will impact the summer months because that is when we start to pay for our back to school buy. Kimberly Greenberger - Citigroup: Okay, terrific, good luck here in 2008.

Thank you.

We will now go on to John Morris of Wachovia please go ahead. John Morris - Wachovia: The cost savings that you mentioned of $12 million potentially, can you give us a sense of how much of that or is that all applied to Children's Place core or is some of it also applying to Disney? Also, if you can give us an update on some of the management searches that are underway and an update there.

John, thank you, Sue can you pick up on this piece?

Certainly, in terms of the work force reductions that we announced to day are in the area of what we call shared services. Shared services are an organization that was created at the time of the Disney acquisition. The accounting organization was put into what is called Shared Services Organization to provide service to both Disney and The Children's Place. The specific groups are accounting and finance, human resources, information technology and then the whole stores organization. The organization that was created to manage maintenance and repairs and design, et cetera for both fleets of store, both Children's Place and Disney. That’s the group that when we refer to Shared Services that’s what we are referring. The announcements today represent about a 30% cut in the shared services headcount. The cost reduction at which we expect to realize in the latter part of 2008 and then the $12 million is the annualized number that we expect to realize in 2009.

Tom, the second part of your question about the executive searches, the search for the CEO is ongoing. It’s part of the whole strategic review process and that’s more of a Board issue at this level, we are staying very focused on recovering the business and maximizing value for shareholders over the medium and long term and really those are the only active search we have ongoing at this time. In terms of the President of the Children's Place, now that we are a single brand business, we just need to evaluate what the structure needs to be there and we haven’t landed that completely yet. But I, for the time being, am enjoying the offer to get much closer to The Children's Place brand as we become a smaller, more focused business. John Morris - Wachovia: Thanks.

We will now go to Margaret Whitfield of Sterne and Agee, please go ahead. Margaret Whitfield – Sterne and Agee: Good morning, you have given us some idea of what SG&A is looking like for the core business and I was wondering if you could comment on what the gross margin was for the core business only in ’07 and any directional comments on what we might expect in ’08.

Our gross margin in the fourth quarter was down in both businesses. We don’t disclose the split; however, I can say it was down more in Disney; it was down in The Children's Place as well. In part, as a result of the more conservative inventory management coming into ’08, we are not buying as much so we are not having to mark down as much. It is our expectation that we can increase our gross margin year on year as a result of having fewer markdowns. Of course, time will tell; but we are in fact buying fewer units so we expect to have lower markdowns in 2008, which should fuel the Children's Place margin. Margaret Whitfield – Sterne and Agee: Any comment on what the base margin was in ’07 for the core business only.

Again Margaret, we have not historically split out the gross margin for Disney and Children's Place; I can’t comment on what the base was except to say that we do expect it to improve in 2008 and the margin was down in both brands in the fourth quarter; but, down more in Disney.

I just want to put a little qualifier on that and that certainly is our target and our hope; but, this is a difficult economic environment and it’s a little dicey to predict where our gross margins are going to go.

Time will certainly tell. Margaret Whitfield – Sterne and Agee: You referred to the strategic review as ongoing, what additional aspects are you considering and nobodies mentioned shoes. Is that a go forward test?

Yes, the shoe business let me have Jill address that and I will come back to the other piece.

The shoe business right now we currently have about in 50 stores. It’s been a business that we are learning a lot from. We are taking our learning’s and applying it to this year and are feeling good about it and feeling actually good about the effects it is even having on our core shoe business that are in the entire chain. Basically, it has been a year of learning for us and we are applying those learning’s going forward.

The second half of your question about the strategic review, it is an ongoing review that is going on at the Board level and with our advisors and you have a big down payment on it today. It is a continuing review and we are not prepared really to talk about other avenues and other aspects we are looking at right now. We are completely committed to maximizing the value for our shareholders and as I said, it is an ongoing and active part of the work of the Board and the Senior Management team here. Margaret Whitfield – Sterne and Agee: Just one question, how many stores do you think Children's Place could ultimately have? Earlier it was stated, I think, 1200 stores and is that still the idea?

I think what we are focusing on right now is really recovering the business and restoring it to it’s previous levels of profitability and productivity and that has to be the focus right now. Then as we get through those first couple of stages, we will need to turn toward the future and the growth opportunities and we have had several on the table. We will dust that off and take a look at it. Right now, I have to say our focus is on recovering the base business and I don’t really want to comment on 1200, 1600 whatever numbers of stores until we really have a chance to thoroughly get into that. Margaret Whitfield – Sterne and Agee: Thank you and good luck.

Thank you Margaret.

We will now go on to Michael Shoregast of Long Acre. Michael Shoregast – Long Acre: I was just wondering, can you talk a little bit in looking at Shared Services, it seemed that maybe that suppose to be divided a little more evenly based on the store count or divided more pro rata based on the store count between Disney and Children's Place and so, I was just wondering was there an opportunity where into ’09 you think you are being conservative and you can bring that number down below 95 million where you are guiding to right now?

I think that this notion of going after our cost structure is an ongoing initiative and the reductions we are seeing in Shared Services are both a result of our decision to exit the Disney business as well as our continuing focus on getting the cost structure of the Company appropriate for our value-orientated retailer. I think it is ongoing and I think we are going to continue to work on those areas particularly through process improvements that will yield lower costs. We also expect for a transition period of at least that we will continue to offer services to the Disney Store chain. We have to work all of that out. Michael Shoregast – Long Acre: Just a follow up to Kimberly’s question, do you feel that you are current borrowing capacity is sufficient or will you have to get something new?

I will let Sue answer that.

What I said to Kimberly is that we are managing cash much more conservatively than we had in the past; we have repatriated $45 million of cash deferring store openings until the later part of this year and we have a significantly lower inventory buy year on year for back to school, which we believe is appropriate given the comps we experienced last year, the markdowns we saw last year and the economic environment that we believe we are heading into. Beyond that I haven’t commented and I am not going to comment at this point on the adequacy of our revolver except to say that we are managing cash much more conservatively than we had in the past. Michael Shoregast – Long Acre: Okay, thank you.

: Janet Kloppenburg – JJK Research: Hi everybody, Sue, just a couple of questions. Can you give us what the depreciation expense was for the Children's Place business last year and can you guys talk a little about the third of the Disney stores that are not being taken back by Disney or not being considered to be taken back by Disney. Are they your expense, will there be charges involved perhaps with store closings? Then I have a couple of other questions about the P & L, thank you.

Let me quickly answer that first question, if we can call it an answer. We are just not at liberty to talk about what is going to happen to those stores right now. Once again, we are in advanced stages of negotiation and we will make all this clear over the next short period of time. (Inaudible) get it resolved. Janet Kloppenburg – JJK Research: Over a short period of time means…short to us is a month or so, is that a fair assumption?

I would say we are talking about days and weeks and not months. Janet Kloppenburg – JJK Research: Thank you very much, go ahead Sue.

Janet, it is Rich. On these depreciation and amortization for Children's Place only for the year was 5 million.

Janet, you said a few more questions. Janet Kloppenburg – JJK Research: On the gross margin line, if you guys could talk a little bit. Obviously, there is an opportunity in ’08 for leverage and occupancy and also improved full price selling. Jill, we are hearing about higher costs coming out of Asia, if you could talk a little bit about what you are seeing there. Last thing Sue, when you say flat SG&A dollars for this year, does that include an assumption of a higher bonus accrual than ’07, thanks?

We start with Jill and answer the questions about the Asia sourcing.

On the question in Asia, our team is over there right now. So far, year to date we have been able to mitigate most of the challenges that we’ve seen over there. We don’t know what the future is going to bring and that’s really where we are currently. Janet Kloppenburg – JJK Research: Wait, say that again Jill. You are unsure yet about the higher cost? Is that what you are saying?

We have been able to mitigate most of the pressure overseas. We place everything through fall ’08. Our teams are over there right now placing holiday and we have yet to see what they come back with currently but through fall of ’08, we have been able to mitigate most of the rising costs overseas and be are going to see what happens for this holiday. Janet Kloppenburg – JJK Research: Are you anticipating having to make any revision to your vendor base or factory choices?

No, nothing dramatic.

We should move on to the question about of occupancy leverage.

Janet, two other questions that you had. You talked about SG&A, we do anticipate when we think about plans for upcoming years to pay bonuses at that plan rate. I would include higher bonus payments, so the speak. In terms of occupancy leverage, we haven’t been committing on forward looking guidance, if you will. As sue mentioned, we are looking at our expenses, value of (inaudible) so our target, of course, would be to begin to leverage those costs but we have not provided specific information for the guidance on that. Janet Kloppenburg – JJK Research: On this, can you give us some guidance on tax rate on a quarterly basis for ’08, please?

Janet, I didn’t give guidance on the prepared remarks on the tax rate. As we said, we are going to give clarity to ’08, once we conclude what we are going to do with regard to the Disney Store. I do expect to see an increase in the rate. A substantial year on year and the reason for that is because we can no longer assert that our cash is invested permanently abroad. So, we will be taxed for the full U.S. rate. Then there a tax strategy in place years ago that are in fact driving the book rate up. Again, more clarity on 2008 once we (inaudible) what we are going to do with Disney Stores. Janet Kloppenburg – JJK Research: Thank so much and lots of luck.

We will now go on to Linda Tsai of MKM Partners please so ahead Ma’am. Linda Tsai - MKM Partners: Yes, hi, the 50 to 100 million exit cost encompasses a wide range, what accounts for the degree of variance? Then, what is just like a conservative estimate that maybe just a range of where you think the long term operating margin goal could get to?

On the 50 to $100 million, we have not concluded our negotiations and there is still several moving parts and alternatives that aren’t here so that’s what accounts for the range. Beyond that, we just can’t comment at this point.

Then, the ongoing margin that really would be stands alone Children's Place. What we said is that we will provide more clarity once we conclude what we are going to do with the Disney Stores. I’d also refer you on the range, if you just look at the 10K, the source of those exit costs or cash expenses are well documented in the 10K. As Chuck said, we just can’t provide more detail on that at this point in time. Linda Tsai - MKM Partners: Do you think you will provide more detail before the quarter ends?

(Inaudible) Shortly, as soon as we possibly can, we will.

Yes. Linda Tsai - MKM Partners: Okay, thank you.

We will now go to Brian Tunick of JP Morgan please go ahead. Andrea for Brian Tunick – JP Morgan: Andrea, could guys perhaps comment what kind of ramifications to Children's Place should we be aware of as a result of exiting the Disney agreement? As I recall, the original agreement appeared fairly onerous to exit. I was just wondering if you can comment on that?

At this point again we can’t comment on anything having to do with the exit until such time as we announce that the discussions with the Walt Disney operation have been concluded. At this point, I can’t provide more clarity except what is in the press release and what’s in the 10K. Have the impairment charge, which is in the press release, you have a range on cash cost recognizing it is a wide range. Again, it is documented in the 10K and beyond that we just cannot provide more clarity to those discussions. We will as soon as the discussions conclude. Andrea for Brian Tunick – JP Morgan: Could you provide any comments regarding Ezra against potential bid for the Company at $24?

We don’t comment on those kind of matters. I think that Ezra’s our largest shareholder; he has been instrumental in building the Company and I think we hope to and continue to work constructively with him as we do with all of our shareholders; but, I know (inaudible) is continuing to improve this business and to enhance shareholder value. Andrea for Brian Tunick – JP Morgan: Okay, that is helpful. Chuck, you mentioned that you guys are looking at the process improvement across the board, could you talk a little more specifically what kind of buckets of SG&A opportunity do you see longer term?

We talked about a couple of them in my prepared remarks. I think that a lot of this has to do with efficiency in organizations a number of levels and appropriate structures like duplication that is one level. There also is a series of process improvements and the big areas we mentioned was our non-merchandise procurement area that probably have purchased these expense items on a more uncoordinated basis and we are learning that as we coordinate those purchases that we can really take advantage of large economies of scale and negotiation and get our cost down there. Other things, just as we said, taking the time to reengineer our stores and make sure that the design that we are very happy with now is built in the most cost effective way both in the immediate cost but also that the materials are chosen to have the lowest life cycle cost. We have been going through in terms of audits and review of different contracts to make sure that we are fully realizing the services that we are paying for and that we are fully availing ourselves of all the credits that we are entitled to several other areas. It is a very broad based look. The management team is highly committed and incentive to go after these costs in an aggressive way. I am really pleased with the progress that we are making. Andrea for Brian Tunick – JP Morgan: Okay, that is helpful; good luck guys.

We will now go to John Roberts of Buckingham Research. John Roberts - Buckingham Research: Thank you and good morning, you have had a lot of good questions already and I just wanted to follow up on something Tom started with earlier and make sure I understand that the 50 to $100 million that you are talking about in cost to exit the Disney business. That in addition to the $80.3 million asset charge was taken in the fourth quarter; both of those items are all cash charges, right, they are not non-cash?

Not exactly, let me clarify this issue. First, the Company took an impairment charge one pertaining to exiting the Disney Store and the other pertaining to our decision not to move forward with Jill Emerson. Those are non-cash charges at this point in time. That is basically taking assets that are on the balance sheet and recognizing that they are not going to be generating cash flows into the future or that they are not going to be utilized as intended and writing them down. That is a non-cash charge. Looking to 2008, what we did say is that there could be a cash charge or cash expenditure from the Children's Place into the Hoop or elsewhere pertaining to the exit of Disney and again that is all documented in the 10K. I just want to clarify the distinction between those two amounts. One is not cash; it is writing down asset value that is on the balance sheet and then the other would in fact be a cash outflow from Children's Place.

John, when you observe there has been many good questions around the 50 to 100 million, there haven’t been many detailed answers yet; but, they will be forth coming. John Roberts - Buckingham Research: I don’t know if you can answer this question or not; but, I will ask it anyway. One third of the stores that I understand you are still in advanced stages of negotiation to determine what to do with them, is for our expenses related to potential outcome of those one third of the store base, is that included in the 50 to 100 million or is there potentially going to be an additional cost for that one third of the store base?

We think that 50 to 100 million represents the entire range of cash cost for exiting the business.

Beyond that we cannot comment, John. John Roberts - Buckingham Research: Okay, that is helpful. Then you very nicely went through a reconciliation of the shared services piece for the fourth quarter telling us what was one time in nature and what was an ongoing expense. I think what most analysis would be looking for the greatest degree of help would be that same reconciliation for the full year $107 million expense. Sue, could you possibly run through that 107 million and just let us know what in there was one time in nature?

Certainly, the strategic alternatives please start with 107 million. You have strategic alternatives of 2.2 million, stock option investigation and related expenses are 10.3 million, pretax, incremental audit fees are 1.2 million and then we have a much larger severance number on the full year and that is because of course we have a CEO severance that was built in there in the third quarter so that is almost $5 million, which gets us to about 88.5 for the normalized shared services for the year. John Roberts - Buckingham Research: Then looking forward to using that 88.5 million as a base, is that the piece that you believe you can reduce by an additional 12%?

Yes. John Roberts - Buckingham Research: Thank you.

We will now go to Margaret Shapiro of The Retail Tracker please go ahead Ma’am. Margaret Shapiro – Retail Tracker: I am very much looking forward to less complicated press releases. I have a Children's Place question since that is the business that is ongoing. Can you just walk us through your thought process today as to what is the right number of stores Children's Place should have across the country outlets versus front line stores and how many of the stores today have been touched and put into the new prototype and are you considering as you look to reduce the cost of these new prototypes as you open stores and renovate, are you considering a new prototype as well?

Yes, as I said before, I don’t think we have a great visibility to the total store count yet. We need to go back and look at that; we do have a division between our Technicolor store and our Applemaple which is about 40/60 overall. We are looking to building more Technicolor obviously that’s our fore into the future but mostly what we are doing is valuing engineering on that format and also doing some refurbishment on some of the other stores; but again value engineering some of those materials as well. Margaret Shapiro – Retail Tracker: If you look at the product assortment going forward and Jill congratulations and I think the stores look so much better, have you looked at the way the store lays out and the fixturing and even things like that as far as the cost in the store as ways to possible reengineer the stores? Given how you are moving forward, it looks like a much cleaner assortment and little bit more edited and I am just curious if you could tinker with even internally in the store.

That is one thing we talk about a lot always looking to find better ways to present the merchandise; but I think much of our focus right now is on value engineering the new prototype. Once we get that to a place where we are comfortable, then we can start looking at any tweaks we think we might have to do to better present things. We are comfortable right now with Technicolor. We are happy right now with the set up of the stores and the way the configuration with the tables and the fixtures.

I do think that Jill, me and Richard have done a great job in terms of really focusing and being more disciplined to the assortment strategy of moving out of third quarter which is giving this store much cleaner and a much more focused look. I think it is part of the way we are going after the reduction of inventories also reduction in style counts and SKUs and so forth. This, I think, is helping our store to be very cleaned up.

The majority of the reduction in inventory is driven by narrowing the assortment, not investing in (inaudible). Margaret Shapiro – Retail Tracker: All right, good luck with everything.

Lastly we have a follow up from Kimberly Greenberger of Citigroup please go ahead Ma’am. Kimberly Greenberger – Citigroup: First, after you exit the Disney business, will you report that as a discontinued operation and restate last year or how will that work, Sue?

Exactly, it will be reported as a discon and we will in fact restate last year for the discontinued operation. Kimberly Greenberger – Citigroup: Would that be done shortly after your conclude your negotiation with the Walt Disney Company you would re-file or when would we get the timing on the restatement?

It would be coincident with the filing of our 10K in the first quarter. Kimberly Greenberger – Citigroup: Okay, so in May we can get a clean LY restated number.

That’s correct. Kimberly Greenberger – Citigroup: Sue, did I hear you right? There would expected to be a higher tax rate here in 2008 on the repatriation of some of the funds?

That is correct. Even though we repatriated toward the end of the fourth quarter of 2007, we can no longer say that our cash is permanently invested abroad. We will be incurring a higher tax rate in 2008 and beyond as a result. Kimberly Greenberger – Citigroup: One last question, any comment you can give publicly on the active dialogue that the board has with Ezra. Is there an open communication line there? Is there a regular dialogue and how are you looking at maintaining that relationship?

I think I mentioned before that Ezra is an active member of our board and obviously he is our largest shareholder, is instrumental in building the business, and has a lot of great insight into this business and we value the input he continues to work actively on the board. It involves major decisions. I just don’t think that much has changed in that regard. Kimberly Greenberger – Citigroup: Great, thank Chuck and good luck in ’08.

I want to thank everybody else for joining us on the call and for your interest in the Company and we will continue to keep you updated as we said repeatedly and hopefully in the near future on the results of this Disney situation. Again, thanks very much; I appreciate your participating and look forward to talking some more.

We actually have two additional questions. Are we going to take those questions?

Sure, why not.

We will go to Vick Camar of Sintos Partner please go ahead. Vick Camar - Sintos Partners: Does your CapEx guidance for the year include the savings from value engineering or is that something in the future?

It includes a portion of them; but, not all of them that we hope to be able to achieve. Vick Camar - Sintos Partners: I just wanted to check; I think you had this before, I think I may have misread the press release. If the 50 to $100 million that you are anticipating for the cash exit cost, is that the entire cost? Maybe I am misreading the press release, anyway it sounds like there might be additional costs of the subsidiary.

We really can’t comment beyond what is in the press release and the 10K at this point in time. Vick Camar - Sintos Partners: Okay, that was it then. Thanks.

: Once again thank you very much for joining us and we will be back in touch soon.