Small blurb on DS closings being mulled over

[Luv2Roam]

This will not come to any surprise to us, but for what it is worth:

* Disney (nyse: DIS - news - people) is weighing whether to close more of its retail stores or even sell all or part of the chain in the face of sagging sales.

Copyright 2003, Reuters News Service


Gee--- sagging sales. That plush and princess crap must be selling REALLY well.

 

[Luv2Roam]

Disney weighs sale, closure of stores -report
Reuters, 05.16.03, 2:15 AM ET

NEW YORK, May 16 (Reuters) - Walt Disney Co. (nyse: DIS - news - people) is debating whether to close additional retail stores or even sell all or part of the underperforming chain, the Wall Street Journal reported on Friday, citing people familiar with the matter.

The report also states that a decision has yet to be reached, and that changes could be weeks away. The number of Disney retail stores has already been reduced to 387 in North America and about 160 overseas, the Journal reported.

A representative of Disney could not immediately be reached for comment early on Friday.

Copyright 2003, Reuters News Service

 

[lrodk]

I had a strong feeling it would come to this. Ever since they did the store make-overs I got to see first hand that the store had little appeal for my taste. And I had been a die-hard customer for many years. Oh well, I guess we'll all have to rely on park visits for our merchandise fix.

 

[grinningghost]

It's sad. TDS used to be my first stop in the mall. I spent a good deal of money in there too. Ever since their "revamp", it's nauseating to even walk by it. I'd rather see it closed than in the sad shape it's in now.

 

[EUROPA]

My wife and I haven't been back after they took out all the adult clothes. This one seems like an easy fix to me. Bring back the stuff that sold. Man somebody must want these stores to go under.

 

[Penny2]

I thought it extremely short sighted to go 'just for the kids' market. I, too, used to spend money at every visit. Now, I rarely stop unless I want to buy Disney Dollars or trinkets for friends kids. Used to love the Gallery Stores the most....we had one great one in Michigan that I went out of my way to visit. Now I buy on Ebay between DW visits. Who's in charge anyway...even I could come up better marketing ideas for these stores!

 

[JoNo]

Oi! Let me tell ya! They killed the pins, the good shirts, even the collectables! If they DO go out of business, I feel sorry for the store to take it's place b/c think about how much $$$ it'll cost to get that darned mosaic-tiled mickey entryway up...

 

[merrywether]

You all bring up an excellent point. Bring back the adult stuff! Not only the clothes, but all adult stuff - jewelry, home items, etc. We adults need more than just a stinkin' clearance rack Mickey coffee mug to keep us sufficiently Disneyfied in between WDW trips!

 

[Luv2Roam]

Disney says may sell chain of stores
Reuters, 05.22.03, 4:42 PM ET

LOS ANGELES, May 22 (Reuters) - Walt Disney Co. (nyse: DIS - news - people) is considering selling its chain of stores in North America and Europe and will probably accelerare closing locations as it prepares for a sale, the company said on Thursday.

Disney sold its Japanese stores in 2001 and said the licensing model in that deal could be good for the worldwide chain, which has been a drain on Disney's financial performance.

Copyright 2003, Reuters News Service


It's very sad indeed. SO much potential and they were just run into the ground. I really feel for the CM's. Us guests don't seem to go in much anymore anyway.

 

[we3luvdisney]

Disney May Sell Ailing Retail Chain
1 hour, 54 minutes ago

By GARY GENTILE, AP Business Writer

LOS ANGELES - The Walt Disney Co., already facing economic challenges at its theme parks and ABC television network, said it may sell its chain of retail stores in North America and Europe.

"We are very optimistic we can actually find a buyer" if the company decides to sell the Disney Store chain, Disney Consumer Products Chairman Andy Mooney said Thursday.

The company has been closing its least profitable stores over the last few years. The number of North American stores has dropped from 522 to 387 and further closings are expected, Disney said.

In preparation for a potential sale, Peter Whitford, who was hired to run the store chain in 2001, has resigned and other executives will lose their jobs over the next few weeks as Disney looks to control costs, the company said. Mooney will run the stores on an interim basis.

Shares of Disney were up 24 cents to $18.12 at the end of regular trading Thursday on the New York Stock Exchange.

Disney said it is considering selling the North American and European stores to a retail specialist who would run them and pay Disney a royalty. The company has yet to hire an investment bank to solicit bids, according to Gary Foster, a spokesman for Disney Consumer Products.

Last year, the company sold its stores in Japan to Oriental Land Co., the same company that runs Tokyo Disneyland. The sale resulted in a net pretax gain of $34 million.

Disney launched the chain in 1987 to sell dolls, videos, mugs, and other items based on characters such as Mickey Mouse and Winnie the Pooh. There are 548 stores worldwide, including 47 in Japan, six in Hong Kong, and stores in London, Paris and other major European cities. They employ 12,000 people.

Profits have been steadily declining and Disney has been experimenting with new layouts, new product mixes and other strategies to reinvigorate the chain. Ultimately, the company concluded it did not have the capital and expertise to succeed.

 

[doombuggy]

Let's see all of the Reuters article:

Disney may sell its stores, speed up closures
May 22, 2003 8:47 PA ET
By Peter Henderson

LOS ANGELES, May 22 (Reuters) - Walt Disney Co. (DIS) is considering shedding its chain of money-losing Disney stores and will accelerate plans to close stores in North America as it looks for a buyer, the company said on Thursday.

Burbank, California-based Disney may need a lot of its magic to unload the chain at a time of retail industry consolidation and the rise of discount stores that are drawing consumers away from established brands, retail analysts said.

Rival movie studio Warner Bros. closed down its chain of stores in 2001 after failing to find a buyer.

Disney stores selling Mickey Mouse and Winnie the Pooh merchandise and theme park tickets were a symbol of company clout in the 1990s. But the chain expanded too far and the number of stores has been shrinking since hitting a peak of 741 in 2000, the company said.

There are now 548 Disney stores globally, including 47 in the Japanese chain Disney sold in 2001. Disney still needs to trim its portfolio and plans to reduce the North American chain to fewer than 300 stores from the current 387.

Disney said it could license its famous name to a buyer of the chain, just as it did in 2001 when it sold the Japan chain to the company that runs the Disney theme parks in Tokyo, Oriental Land Co.

The entire chain lost about $50 million on $1.05 billion in revenue last year, CIBC World Markets analyst Mike Gallant said, adding that there was no reason for Disney to operate the stores if it could strike the right deal.

PROFIT POTENTIAL

Since every $36 million in operating income was worth a penny of earnings per share, turning the money-losing unit into one with a profitable licensing stream would be a boost for Disney, he said.

Wall Street expects Disney as a whole to post earnings of 60 cents per share on revenue of $26.8 billion in fiscal 2003, according to Thomson First Call.

Analysts also saw a licensing model more in tune with Disney's attempt to forge direct relationships with big retail chains, which are seen competing with Disney stores for customers.

Andy Mooney, chairman of Disney's consumer products division, told reporters closing the North American chain was a possibility the company would consider if it had trouble finding a buyer. But he said he was optimistic Disney could sell the chain.

Retail analysts said potential buyers were scarce, although some said foreign companies looking for a foothold in the United States might take up Disney's offer.

George Whalin, president of Retail Management Consultants, said that a sale of the Disney chain was "nearly impossible".

"If they can't find a buyer for this thing, my guess is they will shut it down pretty quickly," he said.

Disney's Mooney said that the chain was profitable in Europe and said he expected to cut a deal, possibly in the next 12 months, although he would not commit to a time frame and said that he had not begun talks with any possible bidders.

Disney's biggest asset is its brand name, which retail analyst Kurt Barnard said could make the sale possible, despite fierce competition among retailers.

"It is not going to be easy, (but) the name Disney still has a lot of magic left," he said. REUTERS

© 2003 Reuters