29 January 2013 01.2009 CPSIA Testing & Certification: The Learning Curve Phase Proprietary and confidential. Do not copy or distribute. ● The Children’s Place is the largest pure-play children’s specialty apparel retailer in North America ● The Children’s Place designs, contracts to manufacture and sells fashionable, high-quality merchandise at value prices, primarily under the proprietary “The Children’s Place” brand name ● The Children’s Place currently operates 1,100+ stores in the US and Canada, and online at www.childrensplace.com ©The Children’s Place 2014 . All Rights Reserved. Product Testing and Compliance Program Safety Quality Performance/Durability Established Product Testing Program 1. Testing Protocols and Standards 2. Test Results and Reporting Procedures 3. Corrective Action and Prevention Action (CAPA) Report and Remediation Procedures 4. Communication and Recordkeeping Procedures 3 ©The Children’s Place 2014 . All Rights Reserved. CPSIA - 16 C.F.R. Part 1107 (“Part 1107 Rule”) Requirements • create and implement a children’s products testing and certification program which provides a “high degree of assurance” that the children’s products that have not been tested are just as compliant with applicable children's product safety standards as products that have been tested and passed all relevant tests Testing and Certification Program Requirements: 1. certification testing performed by third-party CPSC-accredited laboratories 2. testing representative samples of children’s products 3. additional periodic testing 4. additional testing when there has been a material change in product design or manufacturing process 5. establishment of safeguards against undue influence on third party laboratory 4 ©The Children’s Place 2014 . All Rights Reserved. Production Testing: Third-Party Laboratory Testing • For children’s products, accredited third-party testing is required to support issuance of a General Certificate of Conformity (GCC)/Children’s Product Certificate (CPC) certifying compliance with applicable product safety rules and standards • CPSC is required to maintain, on its internet website, an up-to-date list of entities accredited to assess conformity with children’s product safety rules http://www.cpsc.gov/cgi-bin/labsearch/ • NOTE: Each laboratory is accredited for specific rule(s) /standard(s) 5 ©The Children’s Place 2014 . All Rights Reserved. Production Testing and Compliance: Requirements 6 ©The Children’s Place 2014 . All Rights Reserved. Production Testing: Requirements 7 ©The Children’s Place 2014 . All Rights Reserved. Production Testing: Requirements 8 ©The Children’s Place 2014 . All Rights Reserved. Production Testing: (Example) Ready-to-Wear DEVELOPMENT • TRIM 1. Quality 2. Regulatory • BASE FABRIC 1. Quality 2. Regulatory PRE-PRODUCTION • BULK FABRIC 1. Quality 2. Regulatory • GARMENT 1. Quality 2. Regulatory • CPSIA permits components parts testing 9 ©The Children’s Place 2014 . All Rights Reserved. IN-LINE FINAL PRODUCTION • GARMENT Quality • GARMENT Regulatory Production Testing: (Example) Ready-to-Wear ENHANCED IN-LINE TESTING DEVELOPMENT • Quality • Regulatory 10 IN-LINE PRE-PRODUCTION • Quality • Quality • Regulatory ©The Children’s Place 2014 . All Rights Reserved. • Regulatory FINAL PRODUCTION • Regulatory Production Testing: (Example) Ready-to-Wear In-Line and Final Production Testing Plan Tests Production Quantity (pieces) # of Tests (based on PRODUCTION QUANTITIES) Production Duration (weeks) PRODUCTION QUANTITIES Below 60,000 Children's Product Certification (3rd Party Accredited Lab Testing) # TESTS PRODUCTION DURATION (weeks) 50% Lead in Substrate # of TESTS (based on PRODUCTION DURATION) 2 ## Less 5 weeks ## ## Phthalates ## ## ## Pull Test ## ## ## Drawstrings ## ## ## Tests Production Quantity (pieces) # of Tests (based on PRODUCTION QUANTITIES) Production Duration (weeks) PRODUCTION QUANTITIES 30% 70% ## ## Phthalates ## Pull Test Drawstrings Lead in Substrate 11 Below 120,000 # of TESTS (based on PRODUCTION DURATION) Children's Product Certification (3rd Party Accredited Lab Testing) # TESTS PRODUCTION DURATION (weeks) 2 5 ## ## ## ## ## ## ## ## ## ## ## ## ## ## ## ## ## ©The Children’s Place 2014 . All Rights Reserved. Less 8 weeks Additional Testing: Material Changes and Periodic Testing Additional testing required: • Material Changes in product design, manufacturing process or sourcing of component parts • Periodic Testing Testing Plan Requirements: 1. Indicate tests to be conducted 2. Number of samples to be tested 3. Intervals at which tests will be conducted 12 ©The Children’s Place 2014 . All Rights Reserved. Policy Against Undue Influence Requirements • Policy Statement • Include Reporting Procedures • Communication and Training 1. Internal - Code of Business Conduct 2. External - Policy Statement in Vendor Guide and Purchase Order terms and conditions 13 ©The Children’s Place 2014 . All Rights Reserved. Action Points: 1) Partner 2) Educate 3) Communicate 14 ©The Children’s Place 2014 . All Rights Reserved. M. Elena Hogan The Children’s Place (201) 558-2400 ehogan@childrensplace.com 15 ©The Children’s Place 2014 . All Rights Reserved.