1041859--4/1/2009--CHILDRENS_PLACE_RETAIL_STORES

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{system, service, information}

{cost, operation, labor}

{financial, litigation, operation}

{regulation, change, law}

{acquisition, growth, future}

{stock, price, operating}

{operation, international, foreign}

{customer, product, revenue}

{stock, price, share}

{condition, economic, financial}

{operation, natural, condition}

{cost, regulation, environmental}

{capital, credit, financial}

{competitive, industry, competition}

{product, liability, claim}

{personnel, key, retain}

{debt, indebtedness, cash}

{loan, real, estate}

{property, intellectual, protect}

{provision, law, control}

{tax, income, asset}

{product, candidate, development}

We depend on generating sufficient cash flow, together with our existing cash balances and availability under our credit facility to fund our ongoing operations, capital expenditures and debt repayment. In prior years, we have experienced deterioration in our profitability. If we are unable to anticipate and respond to merchandise trends, we may again suffer adverse business consequences. Changes in comparable store sales results from period to period could have a material adverse effect on the market price of our common stock. Because the trading price of our common stock has significantly declined over the past two years, it is possible that one or more parties may seek to acquire us. There is no assurance that any proposal to acquire us will be made or that a sale of our company will occur, nor has our Board determined that a sale of our company is advisable. Recalls and post-manufacture repairs of our products and/or product liability claims against our products could harm our reputation, increase costs or reduce sales. The cost of compliance with the Consumer Product Safety and Improvement Act of 2008 or our inability to comply with such act could have a material adverse effect on our business and results of operations. Currency exchange rate fluctuations may adversely affect our business and results of operations. Any disruption in, or changes to, our consumer credit arrangements, including our private label credit card agreement with Citibank, N.A., may adversely affect our ability to provide consumer credit and write credit insurance. Because we operate certain stores outside the United States and purchase most of our products overseas, some of our revenues, product costs and other expenses are subject to foreign economic risks. Because we use foreign manufacturers, an unaffiliated manufacturer's failure to comply with acceptable labor practices could have an adverse effect on our business. We depend on our relationships with unaffiliated manufacturers and independent agents and our inability to maintain these relationships or the failure of these manufacturers or agents to sustain their business in the current economic environment could adversely affect our business and results of operations. If we are unable to open and operate new stores successfully, our future operating results will be adversely impacted. Our success depends upon the continuing service and capabilities of our management team. The failure to retain management could have a material adverse effect on our business. An unfavorable result from the informal investigation of the SEC and the U.S. Attorney for the District of New Jersey into our historic stock option granting practices could lead to regulatory or criminal fines and penalties, adverse publicity, and other negative consequences. Pending legal and regulatory actions are inherent in our businesses and could adversely affect our results of operations or financial position or harm our businesses or reputation. Disruptions in receiving and distribution could have a material adverse effect on our business. We face significant competition in the retail industry, which could impact our ability to compete successfully against existing or future competition. An inability to execute our business strategies could have a negative impact on our sales and expenses, and consequently on our results of operations and cash flows. If our landlords should suffer financial difficulty, it could have an adverse effect on our business and results of operations and cash flows. A material disruption in our information technology systems could adversely affect our business or results of operations and cash flows. Our ability to discourage, delay or prevent a takeover attempt could reduce the market value of our common stock. We are sensitive to economic, regional and other business conditions, which could adversely affect our future operating results and cash flows. A privacy breach could adversely affect our business. Our profitability could be adversely affected if we are unable to successfully negotiate acceptable lease terms. Because of conditions impacting our quarterly results of operations, including seasonality and other factors, our quarterly results fluctuate. We may be unable to protect our trademarks and other intellectual property rights. The volatility of our stock price could adversely affect the market price of our common stock. Legislative actions and new accounting pronouncements could result in us having to increase our administrative expenses to remain compliant. A major terrorist act that impacts consumer shopping could have a material adverse effect on our business. Changes in federal, state or local law, or our failure to comply with such laws, could increase our expenses and expose us to legal risks. Since a portion of our available cash is located in foreign jurisdictions, if we need such cash to fund domestic needs we may not be able to do so on favorable terms. The creditors of Hoop could attempt to make claims against the Company, such as claims under piercing the corporate veil, alter ego, control person or related theories. If successful, these claims would have a material adverse effect on our financial condition and liquidity. Our failure to successfully manage our online business could have a negative impact on our business. Tax Matters could impact the Company's Results of Operations and Financial Condition.

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1041859--4/1/2009--CHILDRENS_PLACE_RETAIL_STORES_INC