Disney Talking to Children's Place About Buying Back Disney Store Locations

[disneytim]

Disney has had issues in the past with The Children's Place maintaining store standards. Let's hope Disney can reestablish the Disney Store brand on its own without oversaturating the retail market and cheapening the brand like it did before The Children's Place took over.

Disney in talks to buy part of chain from Children's Place

By Michelle Donley
March 20, 2008

NEW YORK (MarketWatch) -- The Walt Disney Co. said Thursday that it's in advanced talks with Children's Place Retail Stores Inc. about buying part of the Disney Store chain in North America. The Burbank, Calif.-based entertainment giant said it believes the retail stores could extend its brand and, with a smaller footprint, add value to the company. Children's Place has a long-term license agreement to operate the Disney Store retail chain in North America, and the retailer said in January that it is reviewing its strategic options, including a long-term strategy to realize the "full potential" for the Disney Store brand.

http://www.marketwatch.com/p.asp?gui...F22740A}&d=nbs

[BigPigletFan]

Yes, this has been going around for a while but with the hold on further remodels to the Pixie Dust store designs this has been another option. TCP has done a lot with the store, the product and the brand -- offering a larger variety in product than Disney did in its last few years with the stores. Whatever the outcome is I hope that it continues to make guests happy and keeps the recent quality increases of the products, lines, and value pricing.

[disneytim]

More news on the potential deal suggests TCP has been looking to dump the Disney Stores with Disney being the obvious choice as buyer.

Troubled retailer Children's Place wants to get out of operating 350 Walt Disney Co.-licensed outlets in North America, and the Mouse is looking to get back in, officials for both companies said Thursday.

"The company believes the Disney Stores can be an important extension of the 'Disney' brand and, with the improved economics provided by a smaller store footprint, could add value to the company in the promotion and monetization of its growing number of robust franchises," Disney said in a press release.

Children's Place, meanwhile, decided to pull out of operating the stores after assessing the potential for earnings growth, the capital needs of the business and the ability to fund those needs.

Disney Stores long have been a sore spot for both companies. Disney's consumer products division struggled to make a go with the outlets but never realized the same success it had with its entertainment and theme park operations.

So Children's Place obtained the Disney Store chain for no fee other than the promise of investing $200 million to refurbish the outlets. Disney also delayed charging Children's Place a licensing fee for two years.

http://www.marketwatch.com/a.asp?g=D...7863600A&d=nbs

[sediment]

Disney had a problem maintaining (The) Disney Stores to its (or our) own standards.
I need to dig up some old thread where I predicted this outcome.

Wow, that was easy.
Post #33:
http://micechat.com/forums/showthrea...dren%27s+Place

[disneytim]

Disney's press release:

http://micechat.com/forums/showthrea...42#post2647342

[Darkbeer]

And from The Children's Place Press Release

http://phx.corporate-ir.net/phoenix....0484&highlight=

1. Exiting the Disney Store North America Business

The Company has decided to exit the Disney Store North America ("DSNA") business after a thorough review of the operation, its potential for earnings growth, its capital needs and its ability to fund such needs from its own resources. The DSNA business is conducted by the Company's subsidiaries Hoop Holdings LLC and Hoop Holding Canada, Inc. under a license from The Walt Disney Company.

The Company and Hoop are actively pursuing alternatives for immediately implementing the exit from the DSNA business. These include a possible disposition by Hoop of a substantial portion of the business or other means to terminate its operations. The Company and Hoop are in an advanced phase of discussions with The Walt Disney Company regarding the terms under which Disney might regain ownership and control of approximately two-thirds of the existing stores. Hoop and the Company intend to disclose the arrangements for exiting the DSNA business in the very near term.

In addition to costs that will be incurred by the Hoop subsidiaries in connection with exiting the DSNA business, at this time the Company expects that it may incur pre-tax cash exit costs in the range of $50 million to $100 million, payable over a period of time. Reflecting its decision to exit the business, the Company recognized a pre-tax asset impairment charge of $80.3 million in the fourth quarter of fiscal 2007, as described below.

Unrelated to the Company's decision to exit the business, Hoop recently received notices of several material breaches under its license agreement with The Walt Disney Company. Hoop believes it has cured some of the asserted breaches and intends to cure or to assert defenses to other asserted breaches.

[disneyballerina]

More in Store for Disney

By Rick Aristotle Munarriz March 20, 2008

Like a Mouseketeer reunion, Disney (NYSE: DIS) is about to get its ears back.
The retail-scarred Children's Place (Nasdaq: PLCE) is in advanced talks to return many of the Disney Store units back to Disney, reversing a 2004 deal by the kid apparel specialist to take over the then-troubled Disney Store concept.
The handoff is part of a lackluster report this morning out of Children's Place. Shares still opened higher, with investors no doubt relieved that Children's Place will now be able to focus on its flagship chain.
There are certainly opportunities out there to move attractively priced clothing basics, even if discounters like Target (NYSE: TGT) and Wal-Mart (NYSE: WMT) have come a long way in updating their lines. In terms of smaller mall-based stores, Children's Place is positioned well in a soft economy against the slightly more upscale offerings of Gymboree's (Nasdaq: GYMB) or Gap's (NYSE: GPS) kid-geared concepts.
However, I think the real winner here will be Disney. It overbuilt its Disney Store chain after the concept's initial success. At one time, you encountered a Disney Store at every suburban shopping mall; the Disney brand just didn't feel special.



Interesting, and the rest is here:
The Motley Fool

[Disneyfan43]

Hmmm.. I wonder what exactly Disney will do with the stores. Im guessing the 2/3 means they will close the unproductive and save the rest. Im just hoping the one in Hoover where I live stays open.

[AlexLoup]

The one in Fresno better remain open.

It's the only place I can get Disney stuff.

[Disneyfan43]

Same here for the mall in Hoover. My parents dont let be buy anything online, so Im stuck going there.

[Aladdin]

The Walt Disney Company today confirmed that it is in advanced discussions with The Children's Place Retail Stores, Inc., to explore terms under which Disney might acquire ownership of a portion of the Disney Store chain in North America.

That is an interesting quote from the press release ~ doesn't sound like Disney wants
them all back ~ they are leaving options open. MAYBE they just want a few locations
to convert them to mini "World of Disney" Stores. Something that would bring in just a little of "the look" that the WoD stores in Anaheim, WDW, and NY have. THAT would really be interesting, and signal a premiere store. BUT they would really want to keep it limited, no more than 1 store per 1 to 1.5 million in population. AND THEN stop with all the crazy redesigning of those stores!!!! THAT has absolutely driven me crazy with those stores, the constant re-design of those stores. That one thing has cost those store millions of wasted dollars.

I just visited one of the Disney Store recently that had the original look, with the pastel shelves, pink and green, the carpeting, the large video screen straight in the back of the store, with the plush mountain, and best of all the animated characters in the rounded front window display, and all the different animated character displays surrounding the upper perimeter of the store, from the Rescue Rangers, to those rolley polley characters I saw in the first Uncle Scrooge Comic book I ever read. They had a great initial design, and then each subsequent "redesign" kept losing magic.

Of course thats not the only issue, the other was that the store started losing the
variety of merchandise that it used to carry, and soon paid no attention to the adult market. That was a major error!

Now, that being said, with the (sign) once again most recent redesign of the Disney Stores, red spakley tiles in the front part of the store, wood floor in the back part of the store, a single line up of Mickey and his closest friends standing on a plank suspensended from the ceiling near the the back of the store ~ that was an improvement compared to their previous sterile emergency room look. But it still is poor
compared to what the Disney Store were, originally. So yes, it's good some serious
thought by Disney is going on right now.

[Ride Warrior]

Yes, this has been going around for a while but with the hold on further remodels to the Pixie Dust store designs this has been another option. TCP has done a lot with the store, the product and the brand -- offering a larger variety in product than Disney did in its last few years with the stores. Whatever the outcome is I hope that it continues to make guests happy and keeps the recent quality increases of the products, lines, and value pricing.

The products at Disney Store under TCP are of higher quality and priced more reasonably than department stores, toy stores, and specialty clothing stores. If Disney desires to buy this division back, it's only because it can see the improvement in profits. Let's hopr that they understand that a return to their former marketing mindset make put a quick end to the current high volume of sales.

[lazyboy97O]

I just visited one of the Disney Store recently that had the original look, with the pastel shelves, pink and green, the carpeting, the large video screen straight in the back of the store, with the plush mountain, and best of all the animated characters in the rounded front window display, and all the different animated character displays surrounding the upper perimeter of the store, from the Rescue Rangers, to those rolley polley characters I saw in the first Uncle Scrooge Comic book I ever read. They had a great initial design, and then each subsequent "redesign" kept losing magic.

About a month ago I drove an hour away just to go stand in a Pink and Green. The only problem is all the merchandise is so bright it kind of sticks out funny. The Castle stores drive me nuts because the castle is the Chateau, but the wrong colors.

Not that I want to see people lose their jobs, but I really want to see Disney close a bunch of stores. There really are way too many of them. The merchandise could also use some real difference from what Wal*Mart carries.

I'm curious to see what my managers all think of this.

[disneytim]

In Disney's press release, they refer to operating locations that have a "smaller store footprint." This suggests to me (hopefully) that they plan on making the new Disney Stores more like specialty boutiques with an eclectic line of merchandise that doesn't mirror what the major retailers like Wal-Mart and Target are selling. If there's one thing Disney had to have learned from Eisner's day, it's that there's no money to be made by competing with yourself. If the Disney Stores position themselves as another mass merchandiser with too many locations, they'll fail . . . . again.

I'd love to see them bring back the Disney Gallery store concept. Collectible-quality items that are a few notches above Wal-Mart grade mass merchandise, but not out of the price range of average consumers.

[Ride Warrior]

In Disney's press release, they refer to operating locations that have a "smaller store footprint." This suggests to me (hopefully) that they plan on making the new Disney Stores more like specialty boutiques with an eclectic line of merchandise that doesn't mirror what the major retailers like Wal-Mart and Target are selling. If there's one thing Disney had to have learned from Eisner's day, it's that there's no money to be made by competing with yourself. If the Disney Stores position themselves as another mass merchandiser with too many locations, they'll fail . . . . again.

I'd love to see them bring back the Disney Gallery store concept. Collectible-quality items that are few notches above Wal-Mart grade mass merchandise, but not out of the price range of average consumers.

Disney Store product lines don't mirror the Disney merchandise of other stores now. It's stores are each already a unique boutique environs.