Disney, Children's Place Still In Licensing Talks

[crazy4wdw]

Disney, Children's Place Still In Licensing Talks

March 15, 2007: 08:16 AM EST

BY DOW JONES NEWSWIRES

Children's Place Retail Stores Inc. said Thursday it is still in talks with Walt Disney Co. regarding potential modifications to certain terms of the company's long-term license agreement to operate the Disney Store retail chain in North America, some of which may be material.

The talks began after Disney notified Children's Place that it failed to comply with certain of its obligations under the license agreement, including obligations with respect to renovation of stores and store maintenance.

Disney has charged that these failures constitute material breaches of the license agreement.

The company and Disney have exchanged proposals regarding the resolution of these issues.

Children's Place said if it is unable to reach agreement with Disney on the modifications, Disney may exercise its rights and remedies under the agreement.

-Angela Moore; 415-439-6400; AskNewswires@dowjones.com

 

[disneytraceyl]

The new stores and disneyshopping.com have very poor customer service. I hate even to buy from them, because I never can rely on getting my item. Of course, noone ever wants to help you. Bad image for Disney

 

[exDS vet]

The new stores and disneyshopping.com have very poor customer service. I hate even to buy from them, because I never can rely on getting my item. Of course, noone ever wants to help you. Bad image for Disney

It was Disney who started the bad image you are referring to. Their "Project GO" initiative in 2000 marked the end of Guest service as we knew it. Under that initiative, CM's were no longer allowed to chat with guests or "storytell". There weren't to talk about the parks when selling passes. All they were expected to do was upsell DVD's and watch guests. Many CM's ignored this program and quit or were fired.

Bob Bell and Peter Whitford were behind Project GO and other DS initiatives that failed. They threatened district managers and store managers (like myself) with their jobs if they resisted the new changes that were supposed to be good for the company.

The Disney Store was notorious for failed internal initiatives. Some of their plans were among the stupidest I had ever seen. I was with DS when the company began failing. When I became a store manager there were over 730 stores. When I left there were around 350. This was just under 3 years.

Disney Consumer Products always felt they knew best. They took adult clothing, home items and collectibles out of the stores and moved them to the catalog. Then they shut down the catalog. They wanted DS to be all about Pooh and Princesses. Mickey, Donald, Goofy, Pluto and Minnie" all were in the past. (except for plush).

Disney couldn't create a boys line of products to save their lives unless it had Buzz Lightyear on it. And even then, they never produced enough product until it was too late. Everything else failed. Perhaps because the films aimed at boys were also losers.

Does Disney think they can save the stores that THEY ruined by taking them over again? I think not. Disney Consumer Products took 18 months to create each product line for The Disney Store. A year and a half is a long time to design and manufacture shirts, toys, snowglobes (just for you YOHO), et.al. If Disney goes through and ends it's relationship with TCP, I would expect them to find another licensee or sell or close the chain alltogether.

Also. I have already read elsewhere that people think Disney wants the stores back so they have a place to build on POTC merchandise. My feeling is that this franchise peaked with last year's movie. If that was their intention, it would be one of the worst decisions ever made. Unless they put Jack Sparrow in "It's A Small World".

 

[mamaprincess]

POTC has far from peaked IMHO. POTC is the hottest franchise Disney has going for them aside from Disney Princess as a whole. I agree that Disneyshopping.com is in bad need of a customer service overhall but I have never visited a Disney Store and had a bad experience. I talked to 2 very nice employees of the Disney Store in my area this week and they both discussed at length their dipleasure with no longer being under the Disney umbrella.

I just wish that things that bare the Disney name were actually owned and operated (in a manner that shows they care) by Disney. Wishful thinking I guess.

 

[Tess'smom]

IMO the Disney stores went completely downhill since TCP were licensed to operate the stores. They do not feel anything like "Disney". I would rather see Disney operated the stores once again with a broader line for all ages like they used to.

 

[DisneyAmber]

Now that Jobs is on the board and a majority shareholder, perhaps he can bring back some fresh ideas and get Disney Stores back on track to get them re-focused on the Customer-centric experience. Disney could learn a lot from the Apple stores concept, which were reported last week as being more successful that Wal-Mart and (I believe) The Gap combined.

 

[exDS vet]

POTC has far from peaked IMHO. POTC is the hottest franchise Disney has going for them aside from Disney Princess as a whole. I agree that Disneyshopping.com is in bad need of a customer service overhall but I have never visited a Disney Store and had a bad experience. I talked to 2 very nice employees of the Disney Store in my area this week and they both discussed at length their dipleasure with no longer being under the Disney umbrella.

I just wish that things that bare the Disney name were actually owned and operated (in a manner that shows they care) by Disney. Wishful thinking I guess.

We'll have to wait until the movie comes out for either point to be proven on whether or not POTC has peaked. But if Lord of the Rings and Harry Potter are any indications, POTC has peaked. And from a merchandising standpoint, I don't see POTC stuff as being nearly as popular as Princess, Pooh or other Disney lines. Besides. Disney Consumer Products was the company's worst performing business unit last year. That says a great deal about Disney's approach to retail. They would probably be best just to let TCP keep running the stores in not risk causing more damage.

Even if the brand has become tarnished over the years, Disney is still a name.

 

[dhluvsDisney]

Don't even get me started on the whole TCP and Disney Store thing. My DD was a CM (seasonal) at our DS recently and due to the Store Policy, only Management was allowed to answer questions on the Park and Passes, etc. My DD knows more about WDW than the management team and had to bite her tongue when the management team was giving out incorrect info.

It has certainly lost and gained some with TCP, but quite frankly, I haven't figured out which is the lesser of two evils.

We just want the "magic" back.

 

[exDS vet]

Don't even get me started on the whole TCP and Disney Store thing. My DD was a CM (seasonal) at our DS recently and due to the Store Policy, only Management was allowed to answer questions on the Park and Passes, etc. My DD knows more about WDW than the management team and had to bite her tongue when the management team was giving out incorrect info.

It has certainly lost and gained some with TCP, but quite frankly, I haven't figured out which is the lesser of two evils.

We just want the "magic" back.

One of the longtime problems with Disney Store CM's selling park passes was that they spent too much time talking about the parks with guests. Management wanted CM's to get in and get out when selling passes. They wanted Guests to call the parks with their questions. After all, Cast Members were not park experts. Even though some of them thought they were.

I had several CM's who had the behavior I just mentioned. It was more effecient and productive for me to sell passes than my CM's. The biggest problem that Disney had (not sure about TCP) was that their CM's were trained to provide the "Disney Magic" to Guests. To a CM, this meant acting like the CM's they interacted with at the parks. This created an environment where Disney Store CM's failed to understand that they were working in retail.

Passports, Disney Dollars and DVD's made no money for the stores. The money was in softlines, accessories and plush. Management wanted CM's on the floor to sell all of the add-ons that they could, and then for the cashier to sell the DVD's, passes, etc. I understand the store policy where your DD is concerned. It's not her fault, but rather that of the original Disney Store for not training CM's correctly from the beginning.

 

[DisneyZell]

do you wonder if Disney is doing this because they realize it was a mistake...and maybe Jobs is even behind it...having the stores out there could grow the Disney name...but right now has been negative. I wonder if they realize it...and this is why they have brought it to TCP's attention.

 

[raidermatt]

Where are all the people who said turning things over to TCP was a good idea?

The stores are actually doing well for TCP based on the figures they released a few months ago. Maybe Disney just wants to renegotiate a better deal? Or maybe they do want to take another shot at it? Who knows?

I'd be surprised if Jobs cares enough about it to be pushing anything, but again, who knows? There's not even any real rumors floating around on this.

As for PotC peaking, that's somewhat debateable. It's actually been unofficially reported that the Pirates merchandise hasn't sold up to expectations. That's not to say it didn't sell at all, just not anywhere near what the company was hoping. Supposedly they are going to shift some of their focus from "toys" to collectables.

But regardless, with the final movie in the trilogy coming out in 2 months, and plans for any further movies still in the planning stages, its safe to say that if it hasn't reached its peak yet, its going to within the next month or three. Certainly it wouldn't make sense to try to take back stores to sell Pirate merchandise when they wouldn't be able to make it happen that quickly.

But, I guess its possible they could want control back in general. We'll see where this leads I guess.

 

[DancingBear]

The new stores and disneyshopping.com have very poor customer service. I hate even to buy from them, because I never can rely on getting my item. Of course, noone ever wants to help you. Bad image for Disney

Disneyshopping.com is still owned by Disney.

 

[DancingBear]

Passports, Disney Dollars and DVD's made no money for the stores.

So upper level management didn't value and reward the contribution of this element of the stores to the Company as a whole--although part of the concept of the stores was to extend the park experience (something they're talking about again now). It's a similar problem to disaggregating the performance measures at WDW so that an individual resort is not incentivized to provide services that may benefit WDW as a whole but which do not add to that resort's bottom line.

 

[Brian_WDW74]

Disneyshopping.com is still owned by Disney.

Yes, but sometimes they just don't act like it. For example, I bought a coffee mug at WDW's WoD and had it shipped back to my resort (CS). On the day I was packing to leave, I noticed that the handle had been broken off. Since I didn't have time to go back to DTD, I took it down to Panchito's Gifts. They didn't have the exact mug in stock, so the CM told me to choose any mug I wanted -- even if it was more expensive than the one I bought. She then wrapped it with extra wrapping paper to make sure it wouldn't break in my luggage.

Contrast this to Disneyshopping.com. I ordered a Jumbo Proof pin, and when I received it, I noticed the post had broken off. I contacted them to see if I could exchange it, and was told that since it was a Proof pin, under no circumstances would they accept a return. This certainly is not the service I expect from Disney.

To bring it back to the topic of this thread: I haven't had any problems with TCP's management of TDS, but if Disney took control back, and ran the stores more like miniature WoD stores, that would make me very happy.

*Brian*

 

[Giggle]

Yes, but if Disney gets control of the stores and runs them like they run disneyshopping.com, it will be a bad situation. I placed a large order Thanksgiving Day this year and still did not have it 2 and a half weeks later. When the order finally arrived I had a set of cocktail plates instead of a lunchbox I had ordered. I had to beg them to send me a shipping label to return the cocktail plates.

 

[Violet Crayon]

The talks began after Disney notified Children's Place that it failed to comply with certain of its obligations under the license agreement, including obligations with respect to renovation of stores and store maintenance.

Ripped carpeting, crumbling walls, missing panels on the wall, broken projector, are all problems visible at one of the stores here. The renovation has been put off several times. This news is good to hear, unless it means the demise of Disney Stores.

 

[exDS vet]

Ripped carpeting, crumbling walls, missing panels on the wall, broken projector, are all problems visible at one of the stores here. The renovation has been put off several times. This news is good to hear, unless it means the demise of Disney Stores.

This sounds like my old Disney Store, which was before TCP came along. I had all of these problems and more. And my store was 14 years old with no updates, remodels, etc. Of course my store was closed, but the entire 3 years I was there, nobody at "upper Disney" lifted a finger to make improvements. My store was high profile, and it was a classic example of "bad show".

This story is really a non-story. I don't see Disney taking the stores back because the only thing they know about running them is running them into the ground. If Disney is making money from the licensing agreement (which you know they are), it makes no sense for them to take the stores back unless they want to close the entire chain.

 

[ASilmser]

As an ex-DS employee (through the high point and the low point) my theory of why TDS did not work out is that they put themselves into a position of competing with themselves.

First: They got rid of the adult merchandise--the collectables, the unique clothing, the artwork, the Disney Collectors club items. I contend that those items never were big sellers, but they made the stores worth coming into. In other words, a family in the mall would come into the Disney Store because it was an event, or a place to get a Disney fix. They would look at all the cool expensive stuff, and then they would buy something else--like a t-shirt or a CD or a plush.

Back at the coorporate office, people looked at the sales figures and decided that it was not worth keeping those higher priced items around any more, even though they added an allure to the store that brought people in. Those items may not have been selling at a fast rate, but they brought families people into the store and kept them there for longer.

At the same time, Disney consumer products was licensing inexpensive Disney products to places like Wal-mart, K-mart, Target, and Kohls. These places used their high volumes to sell t-shirts, sweatshirts, kids clothes, and the latest movie merchandise to people at a much more affordable price point than TDS could afford (it was still lower quality, but people were willing to overlook that)

So: Less people in the store because they are now not much different than the discount store (except for the movie screen that does not always work), people are now used to getting Disney merchandise for a lot less, and they have the impression that TDS sells the same stuff for much more money.The Stores now have to cut hours so that any customer service that might have brought people back to the Disney Stores is now gone--or spotty at best.

TDS then had to compete with the large discount stores in a mall setting. Not really a winnable situation.

In their defense, the retail market is hard to predict, and you need to respond when to changes. But I think when they started making the place less unique and ignored the impact that a broad range of merchandise can have as a way to bring people into the store they started on their slow demise. It used to be a place to stop as a "destination", and near the end, it just became a place to "buy stuff."

 

[raidermatt]

First: They got rid of the adult merchandise--the collectables, the unique clothing, the artwork, the Disney Collectors club items. I contend that those items never were big sellers, but they made the stores worth coming into. In other words, a family in the mall would come into the Disney Store because it was an event, or a place to get a Disney fix. They would look at all the cool expensive stuff, and then they would buy something else--like a t-shirt or a CD or a plush.

You nailed it with my family at least.

At the same time, Disney consumer products was licensing inexpensive Disney products to places like Wal-mart, K-mart, Target, and Kohls. These places used their high volumes to sell t-shirts, sweatshirts, kids clothes, and the latest movie merchandise to people at a much more affordable price point than TDS could afford (it was still lower quality, but people were willing to overlook that)

I agree completely with this. Tangent- I was in a WalMart the other day and saw a rack of kid's clothes with a "Disney Babies" sign over it (I think that's what it was called). There were pictures of Mickey, Minnie and a couple of other characters, but more baby-like in appearance. Sort of like the Muppet Babies I guess. So I walked over just to see what the clothes looked like, and it was all Hello Kitty merchandise.

True, not Disney's fault persay, but it shows the QC issues you will have when you go that route.

This news is good to hear, unless it means the demise of Disney Stores.

They aren't owned or operated by Disney anymore. To me, the demise train left the station long ago.

 

[fairygodmother29577]

Don't even get me started on the whole TCP and Disney Store thing. My DD was a CM (seasonal) at our DS recently and due to the Store Policy, only Management was allowed to answer questions on the Park and Passes, etc. My DD knows more about WDW than the management team and had to bite her tongue when the management team was giving out incorrect info.

It has certainly lost and gained some with TCP, but quite frankly, I haven't figured out which is the lesser of two evils.

We just want the "magic" back.

That must a "store Policy" and not a company policy. My CM's are trained and encouraged to talk to the guests about their experiences and are knowledgable about passes.