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Press Release

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The Children's Place Completes Acquisition of the Disney Store North America Retail Chain

Acquisition Will Strengthen The Children's Place Leading Position
in the Newborn to Age 10 Category

SECAUCUS, N.J.--(BUSINESS WIRE)--Nov. 23, 2004-- The Children's Place Retail Stores, Inc. (Nasdaq: PLCE) today announced that it has successfully completed its previously announced acquisition of the Disney Store retail chain in North America, which currently includes 313 stores.

"This acquisition marks a significant milestone in the growth of The Children's Place," said Ezra Dabah, Chairman and Chief Executive Officer of The Children's Place. "We believe that the Disney brand together with our retail expertise will be a powerful and profitable combination."


The Children's Place Retail Stores, Inc. will operate The Disney Store North America as a wholly owned subsidiary and has the exclusive right to operate the Disney Stores in the United States and Canada under a long-term license and conduct of business agreement. The new subsidiary will be responsible for the store lease obligations. The Children's Place acquired the equity of the Disney Store North America from Disney in exchange for a working capital payment to Disney of approximately $101 million, which takes into account the current level of inventory for the upcoming Holiday season as well as a reduction in accounts payable prior to the acquisition. The Children's Place funded the transaction with cash on hand and short-term borrowings.

The Disney Store North America will continue to design, source and sell merchandise featuring "Disney-branded" characters, past, present and future, and, following a two-year abatement, will begin to pay royalties to Disney on its physical retail store sales. Beginning in October 2005, the Disney Store North America will operate an Internet store featuring a select assortment of merchandise offered in the physical retail locations. The Walt Disney Company will continue to operate the Disney Catalog and will maintain a Disney online retail presence. The Children's Place has committed to invest up to $100 million into the remodeling and operations of the Disney Store North America. Of this amount, an initial $50 million was funded at closing.

"The Children's Place management team has a proven track record of growing a unique and compelling retail concept," said Peter E. Murphy, Senior Executive Vice President and Chief Strategic Officer of The Walt Disney Company. "We believe their commitment to quality, the Disney brand, and entertainment retailing will maximize the Disney Store opportunity. We look forward to a long and rewarding relationship with The Children's Place."

The Children's Place continues to anticipate fiscal 2004 earnings per share growth of approximately 60% over fiscal 2003. This earnings growth does not include the slight accretion anticipated from the Disney Store North America subsidiary. In addition, The Children's Place continues to anticipate fiscal 2005 earnings of approximately $1.90 per share, which includes approximately $0.30 per share from the Disney Store subsidiary.

As previously announced, partly in connection with the acquisition, The Children's Place completed the expansion of its credit facility. In addition, the Company stated that it has established a separate $100 million working capital facility for the new subsidiary. The agent for both facilities is Wells Fargo Retail Finance, the Company's working capital lender.

The Children's Place Retail Stores, Inc. is a leading specialty retailer of high quality, value-priced apparel and accessories for children, newborn to age ten. The Company designs, contracts to manufacture and sells its products under the "The Children's Place" brand name. As of October 30, 2004, the Company operated 734 stores, including 678 stores in the United States, 54 stores in Canada and two stores in Puerto Rico. The Company also sells its merchandise through its virtual store located at

This press release may contain certain forward-looking statements regarding future circumstances. These forward-looking statements are based upon current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements including, in particular, the risks and uncertainties described in the filings of The Children's Place and The Walt Disney Company with the Securities and Exchange Commission. Actual results, events, and performance may differ. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this release does not constitute an admission by The Children's Place or The Walt Disney Company or any other person that the events or circumstances described in such statement are material.

CONTACT: The Children's Place
Seth Udasin, 201-558-2409
Heather Anthony, 201-558-2865
Media Inquiries:
Financial Dynamics
Torie Pennington, 212-850-5629

SOURCE: The Children's Place Retail Stores, Inc.