Key questions from the second quarter earnings call conducted by The Children's Place Retail Stores, Inc.on August 23, 2007.

Kimberly Greenberger (Citigroup): Could you talk about the disclosure in the press release about Disney's ability to grant direct licenses to other specialty retailers and what is the amendment to the agreement versus the June agreement?

Ezra Dabah: We are working closely together. Our relationship to date has been one of a good relationship that is based on what is right for our business and their business. We signed a letter agreement in June and we bounded ourselves to certain deadlines, especially as it relates to 2007 remodels and refreshes. Unfortunately, in view of these deadlines, we were not able to meet, mostly because of circumstances beyond our control. Disney, understanding that, basically gave us waivers and at the same time. So far the waivers were regard to immaterial delays in what we were supposed to do. What they are asking us is to release some of the constraints that we had on them as to their ability to direct to retail license and Specialty retail. They have asked us to do that in the area of adult merchandise. One that is not so relevant to our business and we believe that to the extent that they can increase their adult offering, it is going to be good to our business. They wanted some flexibility regarding their New York store, which is not important to us and important to them, so in view of our good relationship we work together or we need on our end and what we need on their end. We have an understanding that we look forward to document quickly.

Kimberly Greenberger (Citigroup): Could you comment on the violation of internal controls and compliance by two executives internally?

Susan Riley: We had two violations of our policies and procedures on the part of senior executives. One was not an executive officer or a named executive officer and the other was. The violation on the part of the named executive officer was relatively small, although, given there is a heightened sensitivity to our control environment right now given what happened with stock options. The internal control violation or policy violation on the part of the executive who is not a named executive officer is more serious and can be characterized as a serious lapse of judgment. There will be remedial actions. We expect there to be remedial actions that will be taken by our board, but we do expect the executives to remain in place.

Kimberly Greenberger (Citigroup): On the filings, is the only delay in the ability to get those filings updated, the disclosures on the Disney discussion, or is there something else there?

Susan Riley: We feel we need to reach resolution with the Walt Disney Company before we file. The evaluation of our internal control framework has also resulted in the delay in filing. We are committed to August 31, but there maybe some delays to that date.

Kimberly Greenberger (Citigroup): Could you give an update on work-in-progress at Disney and any color on gross margin performance at any of your divisions?

Susan Riley: In this quarter gross margin was down at both brands. The external gross margin was down at both Disney and Children's Place, due primarily to markdowns.

Kimberly Greenberger (Citigroup): Are you seeing some sourcing gains at Disney and those were overwhelmed by higher markdown levels, or are you now seeing the same progress with sourcing and increased IMU at the Disney brand?

Tara Poseley: We are pleased with the direction that we are moving our initial margin. The second quarter was driven by a higher markdown rate, much more promotional environment and it affected our margin for the quarter. We have made good strides in apparel. That was a core competency of the company and we were able to tackle that area first. There would still be some savings in that area, but the area we still have opportunity in toys, but we want to find the right partners in toys. We are taking that slowly to make sure these are long-term partners. We do believe as we expand our sourcing base in that area we will continue to glean better initial margins in the future.

Kimberly Greenberger (Citigroup): The Disney concessions are in adult merchandise, not in product, that would draw children necessarily to other specialty retailers. Is that the right way to read it?

Ezra Dabah: That is correct.

Janet Kloppenburg (JJK Research): Could you talk about the corrections to course you took specifically?

Amy Hauk: In hindsight in the second quarter, there are a couple of missteps that we made. We launched Ariel and her sisters and we did the Tiki Family collection, and we did an interruptive, more sophisticated flat line art style. It just did not resonate with our guests. We corrected that going forward. We are being more literal in story telling in our art style. We have one idea too many in our stores in the second quarter.

Janet Kloppenburg (JJK Research): Could you talk about the competitive profile in the back-to-school period?

Ezra Dabah: Back-to-school season started off competitively with Wal-Mart being the first, dropping prices 10% to 15%. The majority of that slowdown in the start to the season had to do with those major states that delayed their back-to-school opening. Because of the slow start, everybody became competitive and we were part of that. Whatever we did, our promotion cadence on denim and expediting our back-to-school sale about ten days earlier has helped results month-to-date.

Janet Kloppenburg (JJK Research): Is there a way to create a situation, where you and Disney have an understanding and where you are not constantly in violation of contract covenants?

Ezra Dabah: We have gotten some relief on our obligations in 2007 and 2008, so one might take that from there that we have gotten some ability to push back some of our obligation in 2008 and 2009.

John Zolidis (Buckingham Research): Could you give the square footage for both divisions?