Key questions from the fourth quarter earnings call conducted by The Children’s Place Retail Stores, Inc. on March 19, 2008.

Tom Flanagan (SIG): 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 cash flow negative performance and if so, are the costs related to that closing embedded in your 50 to $100 million charge?

Chuck Crovitz: We are in discussion 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 can not 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.

Jill Kronenberger: In spring, there is a nice sales 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 well positioned in a difficult environment that we are in. Something that we have been talking to and that is 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): Is there any response to the funding of the cost related to exiting Disney?

Sue Riley: It is premature; we will be getting back to you with more detail.

Kimberly Greenberger (Citigroup): How many of the one time items that you listed in the press release are included in the 107 million?

Sue Riley: 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, 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.

Kimberly Greenberger (Citigroup): 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?

Sue Riley: 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): What are you thinking about the cash management in 2008 and do you think you have sufficient looking capital line of credit to get you through to the third and fourth quarter, which tend to be the quarters when you start building cash back again?

Sue Riley: We are managing our cash much more tightly than we have before. 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 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.

John Morris (Wachovia): How much of the cost savings of $12 million potentially are applied to Children's Place core or is some of it also applying to Disney?

Sue Riley: 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 is the group that when we refer to Shared Services that is 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.

John Morris (Wachovia): Can you give an update on some of the management searches that are underway?

Chuck Crovitz: The search for the CEO is ongoing. It is part of the whole strategic review process and that is more of a Board issue at this level, we are staying focused on recovering the business and maximizing value for shareholders over the medium and long term and 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 have not landed that completely yet.

Margaret Whitfield (Sterne and Agee): What the gross margin was for the core business only in 2007 and any directional comments on what we might expect in 2008?

Sue Riley: Our gross margin in the fourth quarter was down in both businesses. We do not 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 2008, we are not buying as much so we do not have 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. Time will tell; but we are 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): What the base margin was in 2007 for the core business only?

Sue Riley: We have not historically split out the gross margin for Disney and Children's Place; I can not 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.