The Children's Place Retail Stores Inc has hired a financial advisor to help it carry out a strategic review of its business "to improve operations and enhance shareholder value."

The Secaucus, New Jersey-based children's clothing retailer said today (24 October) that Lehman Brothers will investigate ways to improve the company's competitive position - which may include organisational and operational improvements, a recapitalisation, or other transactions.

Chuck Crovitz, interim chief executive officer, said: "We believe it is in the best interest of the company, our shareholders, and employees to initiate a comprehensive review of strategic alternatives for the business and to evaluate a variety of different options for enhancing shareholder value."

In recent weeks the retailer, which operates 889 The Children's Place stores and 328 Disney Stores, has been the subject of speculation that it is for sale.

Last week its former CEO Ezra Dabah revealed in a filing with the Securities and Exchange Commission that he was lining up to make a buyout bid for the firm. Dabah was axed last month for violating the company's code of conduct on securities trades.

The Children's Place has also been battling with The Walt Disney Company with whom it has an agreement to operate Disney Stores, and has failed to file a quarterly report with the Securities and Exchange Commission since June 2006.

And earlier this month it slashed its full year earnings per share forecast after September same-store sales fell 3% following heavy discounting.