SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
________________
FORM
11-K
(Mark
One)
x ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For
the
year ended December 31, 2005
OR
o TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For
the
transition period from __________ to __________
____________
Commission
file number 333-85834
____________
The
Children’s Place 401(k) Savings Plan
A.
(Full title of the Plan)
The
Children’s Place Retail Stores, Inc.
B.
(Name of issuer of the securities held pursuant to the Plan)
915
Secaucus Road
Secaucus,
NJ 07094
(Address
of principal executive office)
THE
CHILDREN’S PLACE 401(K) SAVINGS PLAN
TABLE
OF CONTENTS
|
Page
|
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
1
|
|
FINANCIAL
STATEMENTS:
|
|
|
Statements
of Net Assets Available for Benefits as of December 31, 2005 and
2004
|
2
|
|
Statement
of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 2005
|
3
|
|
Notes
to Financial Statements as of December 31, 2005 and 2004, and
for the Year
Ended December 31, 2005
|
4-8
|
|
SUPPLEMENTAL
SCHEDULE:
|
|
|
Form
5500, Schedule H, Part IV, Line 4i—Schedule of Assets (Held at End of
Year) as of December 31, 2005
|
9
|
|
SIGNATURE
|
10
|
|
EXHIBIT
|
|
|
23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
11
|
Note:
All
other schedules required by Section 2520.103-10 of the Department of Labor’s
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974 have been omitted because they are not
applicable.
Required
Information
Pursuant
to the section of the General Instructions to Form 11-K entitled “Required
Information,”
this Annual Report on Form 11-K for the year ended December 31, 2005 consists
of
audited financial statements of The Children’s Place 401(k) Savings Plan as of
December 31, 2005 and December 31, 2004 and for the year ended December 31,
2005
and the supplemental schedule thereto. The Children’s Place 401(k) Savings Plan
is subject to the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and in accordance with Item 4 of the sections of the General
Instructions to Form 11-K entitled “Required Information,” the financial
statements and supplemental schedule furnished herewith have been prepared
in
accordance with the financial reporting requirements of ERISA in lieu of the
requirements of Items 1-3 of that section of the General Instructions. Schedules
I, II and III are not submitted because they are either not applicable, the
required information is included in the financial statements or notes thereto,
or they are not required under ERISA.
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
Trustees and Participants of
The
Children’s Place 401(k) Savings Plan
Secaucus,
New Jersey
We
have
audited the accompanying statements of net assets available for benefits of
The
Children’s Place 401(k) Savings Plan (the “Plan”) as of December 31, 2005 and
2004, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2005. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Plan is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in
the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining,
on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In
our
opinion, such financial statements present fairly, in all material respects,
the
net assets available for benefits of the Plan as of December 31, 2005 and 2004,
and the changes in net assets available for benefits for the year ended December
31, 2005 in conformity with accounting principles generally accepted in the
United States of America.
Our
audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets
(held
at end of year) as of December 31, 2005 is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This schedule is the responsibility
of
the Plan's management. Such supplemental schedule has been subjected to the
auditing procedures applied in our audit of the basic 2005 financial statements
and, in our opinion, is fairly stated in all material respects when considered
in relation to the basic financial statements taken as a whole.
/s/
Deloitte & Touche LLP
Parsippany,
New Jersey
June
28,
2006
THE
CHILDREN'S PLACE 401(k) SAVINGS PLAN
STATEMENTS
OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER
31, 2005 AND 2004
|
2005
|
2004
|
||||||
|
ASSETS:
|
|||||||
|
Participant-directed
investments
|
$
|
31,666,215
|
$
|
22,808,410
|
|||
|
Receivables:
|
|||||||
|
Employer
contribution
|
185,777
|
-
|
|||||
|
Total
Assets
|
$
|
31,851,992
|
$
|
22,808,410
|
|||
|
LIABILITIES:
|
|||||||
|
Excess
contributions payable
|
-
|
487,299
|
|||||
|
Administrative
expense payable
|
10
|
-
|
|||||
|
Total
Liabilities
|
10
|
487,299
|
|||||
|
NET
ASSETS AVAILABLE FOR BENEFITS
|
$
|
31,851,982
|
$
|
22,321,111
|
|||
See
notes
to financial statements.
-
2 -
THE
CHILDREN'S PLACE 401(k) SAVINGS PLAN
STATEMENT
OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR
THE YEAR ENDED DECEMBER 31, 2005
|
ADDITIONS:
|
||||
|
Contributions:
|
||||
|
Participant
contributions
|
$
|
5,159,814
|
||
|
Employer
contributions
|
1,630,722
|
|||
|
Rollovers
|
2,304,536
|
|||
|
Total
contributions
|
9,095,072
|
|||
|
Investment
income:
|
||||
|
Net
appreciation in fair value of investments
|
1,311,401
|
|||
|
Dividends
|
1,034,728
|
|||
|
Interest
|
39,940
|
|||
|
Net
investment income
|
2,386,069
|
|||
|
DEDUCTIONS:
|
||||
|
Benefits
paid to participants
|
1,934,867
|
|||
|
Administrative
expenses
|
15,403
|
|||
|
Total
deductions
|
1,950,270
|
|||
|
INCREASE
IN NET ASSETS
|
9,530,871
|
|||
|
NET
ASSETS AVAILABLE FOR BENEFITS:
|
||||
|
Beginning
of year
|
22,321,111
|
|||
|
End
of year
|
$
|
31,851,982
|
See
notes
to financial statements.
-
3 -
THE
CHILDREN’S PLACE 401(k) SAVINGS plan
NOTES
TO FINANCIAL STATEMENTS
AS
OF DECEMBER 31, 2005 AND 2004, AND FOR THE YEAR ENDED DECEMBER 31,
2005
|
1.
|
DESCRIPTION
OF THE PLAN
|
The
following description of The Children’s Place 401(k) Savings Plan (the “Plan”)
is provided for general information purposes only. Participants should refer
to
the Plan document for more complete information.
General—The
Plan
is a defined contribution plan covering substantially all employees of The
Children’s Place Retail Stores, Inc. (the “Company” or “Sponsor”) and its
subsidiaries organized in the United States who have three months of service.
Fidelity Management and Trust Company serves as the trustee of the Plan. The
Plan is subject to the provisions of the Employee Retirement Income Security
Act
of 1974 (“ERISA”).
Contributions—Each
year, participants may contribute up to 60% of their pretax annual compensation,
as defined in the Plan, subject to certain limitations of the Internal Revenue
Code (“IRC”). The Company contributes up to 50% of the first 5% of base
compensation that a participant contributes to the Plan. Participants may also
contribute amounts representing distributions from other qualified defined
benefit or defined contribution plans.
Participant
Accounts—Individual
accounts are maintained for each Plan participant. Each participant’s account is
credited with the participant’s contribution, the Company’s matching
contribution and Plan earnings, and charged with withdrawals and an allocation
of Plan losses. Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is entitled is the
benefit that can be provided from the participant’s vested account.
Investments—Participants
direct the investment of their contributions into various investment options
offered by the Plan. Company contributions are invested pursuant to participant
elections. The Plan currently offers twenty-one mutual funds and The Children’s
Place Retail Stores, Inc. common stock, (“The Children’s Place Common Stock”) as
investment options for participants.
Vesting—
Participants are vested immediately in their contributions plus actual earnings
thereon. For the year ended December 31, 2005, vesting in the Company’s
contribution portion of their accounts was based on years of continuous service,
as follows:
|
Years
of Service
|
Vested
Percentage
|
|
1
|
0%
|
|
2
|
25%
|
|
3
|
50%
|
|
4
|
75%
|
|
5
|
100%
|
-
4 -
Participant
Loans—Participants
may borrow from their fund accounts up to a maximum of $50,000 or 50% of their
account balance, whichever is less. The loans are secured by the balance in
the
participant’s account and bear interest at an annual rate of prime plus 1%.
Principal and interest is paid ratably through payroll deductions.
Payment
of Benefits—
On
termination of service due to death, disability, or retirement, a participant
or
participant’s beneficiary upon death may elect to receive either a lump-sum
amount equal to the value of the participant’s vested interest in his or her
account, or annual installments over a ten-year period. For termination of
service for other reasons, a participant may receive the value of the vested
interest in his or her account as a lump-sum distribution.
Forfeited
Accounts—At
December 31, 2005 and 2004, forfeited nonvested accounts totaled $3,544 and
$2,890, respectively. These accounts will be used to reduce future employer
contributions. During the year ended December 31, 2005, employer
contributions were reduced by $150,900 from forfeited nonvested
accounts.
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES
|
Basis
of Accounting—The
accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of
America.
Use
of Estimates—The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, and changes therein and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
Risks
and Uncertainties—The
Plan
utilizes various investment instruments, including mutual funds. Investment
securities, in general, are exposed to various risks, such as interest rate,
credit, and overall market volatility. Due to the level of risk associated
with
certain investment securities, it is reasonably possible that changes in the
values of investment securities will occur in the near term and that such
changes could materially affect the amounts reported in the financial
statements.
Investment
Valuation and Income Recognition—The
Plan’s investments are stated at fair value and quoted market prices are used to
value investments, except for the investment in the common collective trust,
Fidelity Managed Income Portfolio (managed by Fidelity Management Trust
Company). The common collective trust is stated at an estimated fair value
based
on the unit values of the underlying funds. As of December 31, 2005 and 2004,
the Plan’s investment in the Fidelity Managed Income Portfolio is $8,588,420 and
$7,674,825, respectively. Shares of mutual funds are valued at quoted market
prices, which represent the net asset value of shares held by the Plan at year
end. Participant loans are valued at the outstanding loan
balances.
Purchases
and sales of securities are recorded on a trade-date basis. Interest income
is
recorded on the accrual basis. Dividends are recorded on the ex-dividend
date.
Management
fees and operating expenses charged to the Plan for investments in the mutual
funds are deducted from income earned on a daily basis and are not separately
reflected. Consequently, management fees and operating expenses are reflected
as
a reduction of investment return for such investments.
Administrative
Expenses—Administrative
expenses of the Plan are paid by the Plan and the Sponsor as provided in the
Plan document.
Payment
of Benefits—Benefit
payments to participants are recorded upon distribution. As of December 31,
2005
and 2004, there were no amounts allocated to accounts of persons who have
elected to withdraw from the Plan but have not yet been paid.
-
5 -
Excess
Contributions Payable—The
Plan
is required to return contributions received during the Plan year in excess
of
the IRC limits. As of December 31, 2005 and 2004, the Plan recorded a liability
in the amount of $0 and $487,299, respectively.
|
3.
|
INVESTMENTS
|
The
Plan’s investments that represented 5% or more of the Plan’s net assets
available for benefits as of December 31, 2005 and 2004, are as
follows:
|
2005
|
|
|
2004
|
|||||
|
**Fidelity
Equity Income Fund (98,036 shares and 90,073 shares,
respectively)
|
$
|
5,174,353
|
$
|
4,754,070
|
||||
|
**Fidelity
Diversified International Fund (76,190 shares and 57,723 shares,
respectively)
|
2,479,223
|
1,653,175
|
||||||
|
**Fidelity
Mid-Cap Stock Fund (100,365 shares and 73,172 shares,
respectively)
|
2,666,695
|
1,715,873
|
||||||
|
**Fidelity
Managed Income Portfolio Fund (8,588,420 shares and 7,674,825 shares,
respectively)
|
8,588,420
|
7,674,825
|
||||||
|
**The
Children's Place Common Stock (35,079 shares and 36,273 shares,
respectively)
|
1,733,594
|
1,343,186
|
**Party-in-interest
During
the year ended December 31, 2005, the Plan’s investments (including gains
and losses on investments bought and sold, as well as held during the year)
appreciated (depreciated) in value as follows:
|
Equity
Funds
|
$
|
703,864
|
|||
|
Bond
Funds
|
(29,549
|
)
|
|||
|
Balanced
Funds
|
140,496
|
||||
|
The
Children's Place Common Stock
|
496,590
|
||||
|
Net
appreciation in fair value of investments
|
$
|
1,311,401
|
4.
EXEMPT
PARTY-IN-INTEREST TRANSACTIONS
Certain
Plan investments are shares of mutual funds managed by Fidelity Management
and
Trust Company. Fidelity Management and Trust Company is the trustee as defined
by the Plan and, therefore, these transactions qualify as exempt
party-in-interest transactions. Fees paid by the Plan for investment management
services were included as a reduction of the return earned on each
fund.
At
December 31, 2005 and 2004, the Plan held 35,079 and 36,273 shares,
respectively, of common stock of The Children’s Place Retail Stores, Inc., the
sponsoring employer, with a cost basis of $885,367 and $746,218, respectively.
-
6 -
Certain
employees and officers of the Company, who may also be participants in the
Plan,
perform administrative services to the Plan at no cost to the Plan. These
party-in-interest transactions are not deemed prohibited because they are
covered by statutory and administrative exemptions from the Code and the rules
and prohibited transactions of ERISA.
|
5.
|
PLAN
TERMINATION
|
Although
it has not expressed any intention to do so, the Company has the right under
the
Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions set forth in ERISA. In the event that the Plan is
terminated, participants would become 100% vested in their
accounts.
|
6.
|
FEDERAL
INCOME TAX STATUS
|
The
Plan
uses a non-standardized prototype plan document sponsored by Fidelity Management
and Trust Company (“FMTC”). FMTC received an opinion letter from the Internal
Revenue Service (“IRS”), dated October 9, 2003, which states that the prototype
document satisfies the applicable provisions of the IRC. The Plan itself has
not
received a determination letter from the IRS. However, the Plan’s management
believes that the Plan is currently designed and being operated in compliance
with the applicable requirements of the IRC. Therefore, no provision for income
tax has been included in the Plan’s financial statements.
|
7.
|
RECONCILIATION
OF FINANCIAL STATEMENTS TO FORM
5500
|
Loans
to
participants per the statement of net assets available for benefits differs
from
loans to participants per the Form 5500 as of December 31, 2005, because certain
conditions apply which cause the loan to be reported as a deemed distribution
for tax purposes. This loan is properly reported as a Plan asset for financial
statement purposes as determined by the written terms of the Plan document,
related Plan policies and procedures and the loan document. The distributions
per the statement of changes in net assets available for benefits differs from
the distributions per Form 5500 because these loans were deemed distributed
for
tax purposes during the current year.
Additionally,
the stock purchase account is a money market account that is used as a
plan-level account in the recordkeeping of the purchase and sale of fractional
shares of The Children’s Place Common Stock.
The
following is a reconciliation of net assets available for benefits per the
financial statements to Form 5500 as of December 31, 2005 and 2004:
|
2005
|
|
2004
|
||||||
|
Net
assets available per the financial statements
|
$
|
31,851,982
|
$
|
22,321,111
|
||||
|
Less:
Participant loan amounts deemed distributed for tax
purposes
|
(11,592
|
)
|
(10,042
|
)
|
||||
|
Add:
Excess contributions payable to participants
|
-
|
487,299
|
||||||
|
Net
assets available for benefits per Form 5500
|
$
|
31,840,390
|
$
|
22,798,368
|
-
7 -
The
total
interest required to be reported on Form 5500 includes interest bearing cash
in
The Children’s Place Stock Purchase Account and excludes loans that have been
deemed distributed and have had no post-default payment activity. The following
is a reconciliation of interest per the financial statements to Form 5500 for
the year ended December 31, 2005:
|
2005
|
|||||
|
Interest
per the financial statements
|
$
|
39,940
|
|||
|
Less:
Interest on deemed loans with no default payments
|
(867
|
)
|
|||
|
Total
interest per Form 5500
|
$
|
39,073
|
The
following is a reconciliation of benefits paid to participants per the financial
statements to Form 5500 for the year ended December 31, 2005:
|
2005
|
|||||
|
Benefits
paid to participants per the financial statements
|
$
|
1,934,867
|
|||
|
Less:
Prior year participant loans deemed distributed for tax
purposes
|
(10,042
|
)
|
|||
|
Add:
Current year participant loans deemed distributed for tax
purposes
|
11,592
|
||||
|
Less:
Interest on deemed loans with no default payments
|
(867
|
)
|
|||
|
Benefit
payments to participants per Form 5500
|
$
|
1,935,550
|
|
8.
|
SUBSEQUENT
EVENTS
|
Effective
January 1, 2006, the Plan was amended to adopt a safe harbor company matching
contribution formula for non-highly compensated participants.
******
-
8 -
|
THE
CHILDREN'S PLACE 401(k) SAVINGS PLAN
|
||||
|
FORM
5500, SCHEDULE H, PART IV, LINE 4i -
|
||||
|
SCHEDULE
OF ASSETS (HELD AT END OF YEAR)
|
EIN:
31-1241495
|
|||
|
AS
OF DECEMBER 31, 2005
|
PLAN
No. 001
|
|||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
|
|
Identity
of Issue, Borrower,
|
Description
of Investment, Including
|
Cost
|
Current
|
||
|
Lessor
or Similar Party
|
Maturity
Date, Rate of Interest,
|
Value
|
|||
|
Collateral,
Par or Maturity Value
|
|||||
|
*
|
Fidelity
Equity Income Fund
|
Mutual
Fund
|
**
|
$
|
5,174,354
|
|
*
|
Fidelity
Investment Grade Bond Fund
|
Mutual
Fund
|
**
|
1,492,417
|
|
|
*
|
Fidelity
Blue Chip Growth Fund
|
Mutual
Fund
|
**
|
1,493,690
|
|
|
*
|
Fidelity
Low Priced Stock Fund
|
Mutual
Fund
|
**
|
1,246,305
|
|
|
*
|
Fidelity
Diversified International Fund
|
Mutual
Fund
|
**
|
2,479,223
|
|
|
*
|
Fidelity
Dividend Growth Fund
|
Mutual
Fund
|
**
|
682,866
|
|
|
*
|
Fidelity
Small Cap Independent Fund
|
Mutual
Fund
|
**
|
673,137
|
|
|
*
|
Fidelity
Mid-Cap Stock Fund
|
Mutual
Fund
|
**
|
2,666,695
|
|
|
*
|
Fidelity
Freedom Income Fund
|
Mutual
Fund
|
**
|
53,636
|
|
|
*
|
Fidelity
Freedom 2000 Fund
|
Mutual
Fund
|
**
|
101,703
|
|
|
*
|
Fidelity
Freedom 2010 Fund
|
Mutual
Fund
|
**
|
400,914
|
|
|
*
|
Fidelity
Freedom 2020 Fund
|
Mutual
Fund
|
**
|
730,710
|
|
|
*
|
Fidelity
Freedom 2030 Fund
|
Mutual
Fund
|
**
|
805,529
|
|
|
*
|
Fidelity
Freedom 2040 Fund
|
Mutual
Fund
|
**
|
247,748
|
|
|
*
|
Fidelity
Freedom 2005 Fund
|
Mutual
Fund
|
**
|
33,564
|
|
|
*
|
Fidelity
Freedom 2015 Fund
|
Mutual
Fund
|
**
|
561,819
|
|
|
*
|
Fidelity
Freedom 2025 Fund
|
Mutual
Fund
|
**
|
304,276
|
|
|
*
|
Fidelity
Freedom 2035 Fund
|
Mutual
Fund
|
**
|
221,593
|
|
|
*
|
Fidelity
Managed Income Portfolio
|
Common/Collective
Trust
|
**
|
8,588,420
|
|
|
Spartan
US Equity Index Fund
|
Mutual
Fund
|
**
|
620,039
|
||
|
AMR
Small Cap Value Fund
|
Mutual
Fund
|
**
|
422,124
|
||
|
*
|
The
Children's Place Common Stock
|
Common
Stock
|
**
|
1,733,594
|
|
|
*
|
The
Children’s Place Stock Purchase Acct.
|
Interest
Bearing Cash
|
**
|
105
|
|
|
*
|
Loans
to Participants
|
Loan
Fund - Participant Loans at
|
**
|
||
|
interest
rates ranging from 5% to 10%
|
|
||||
|
maturity
dates from 2006 to 2016
|
931,754
|
||||
|
TOTAL
INVESTMENTS
|
$
|
31,666,215
|
|||
*Party
in
interest
**Cost
information is not required for participant directed investments, and is
therefore not included.
-
9 -
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the trustees (or
other persons who administer the employee benefit plan) have duly caused this
annual report to be signed on its behalf by the undersigned, hereunto duly
authorized.
The
Children's Place 401(k) Savings Plan
(Name
of
Plan)
By:
/s/
Susan Riley
Susan
Riley, Senior Vice President, Chief Financial Officer
June
29,
2006
-
10 -
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
consent to the incorporation by reference in Registration Statement No.
333-85834 on
Form
S-8 of our report dated June 28, 2006, appearing in this Annual Report on Form
11-K of The Children’s Place 401(k) Savings Plan for the year ended December 31,
2005.
/s/
Deloitte & Touche LLP
Parsippany,
New Jersey
June
28,
2006
-
11 -