Disney Stores On the Block - Talks continue w/TCP

[Sarangel]

Children's Place Retail Stores Inc. said on Thursday it has signed a nonbinding letter of intent to buy Walt Disney Co.'s money-losing Disney Store chain in North America, which has been on the block for more than a year.

The fast-growing mall-based children's clothing retailer said talks with Disney on the possible acquisition -- first made public in June -- continue.

The Disney Store's retail operations in the United States and Canada have consistently weighed on Disney's earnings. The European Disney Store chain, which is profitable, is also up for sale.

Disney's stores sell clothing, toys and other merchandise featuring Walt Disney characters and draw legions of visitors each year. But most of the North American Disney Stores are in malls, which have suffered from a plunge in shopper traffic.

Disney has shifted its strategy away from peddling consumer goods at its own stores toward licensing products for sale by other major retailers.

The discussions between Disney and Children's Place involve the operation of the retail chain under a long-term licensing agreement, Children's Place said in a statement.

The Disney Stores on Fifth Avenue in midtown Manhattan, at the Disney theme parks, and on the Disney studio lot in Burbank, California, are not part of the auction.

Secaucus, New Jersey-based Children's Place, which focuses on young children and sells its own branded clothing line out of its 715 stores, said its July same-store sales rose 14 percent compared with a 7 percent increase in the year-earlier period, thanks to a sales promotion during the month.

But while the sale brought customers into Children's Place stores and cleaned out inventories, it had no effect on the company's gross margin. Children's Place said it still expected to report a second-quarter loss of about 38 cents a share to 40 cents a share, which compares with analysts' average estimate of a 39 cent a share loss, according to Reuters Estimates.

 

[raidermatt]

I don't know... is selling the stores to another company who is already losing money going to create another set of problems?

 

[mickeymule]

(Bloomberg News) Children's Place Retail Stores Inc., which operates clothing stores in malls, said it had signed a letter of intent to purchase Walt Disney Co.'s Disney Store chain in North America.

Children's Place would run the stores under a licensing agreement. The company said it was not certain that the talks would lead to a purchase.

Burbank-based Disney last year closed 82 stores worldwide, reducing its total to 481.

 

[Parrothead1964]

I can't think of too much else to say about this except the whole fiasco is a terrible shame. A great concept reduced to nothing.

 

[Disneytroll]

Hi

 

[mitros]

Funny how Walt and Roy made a lot of money for their company by selling Disney merchandise.... On the other hand, put a clown in charge of the Disney stores full of Disney merchandise, and it looses big time.

 

[CinderellaIam]

I can tell you from seeing the documents first hand...The Children's Place is already re-negotiating Disney Store leases that are soon to expire...this tells me the deal is done.

I agree, it is a shame that Disney could no longer run these stores profitably. You trully have to question some of their decisions, like removing collectibles from the stores and the lack of tie in product with new movie releases.

 

[Planogirl]

Too bad...

I was recently in our local Disney Store and I noticed that many of the adult items are gone once again. It made me wonder if it was reverting back to strictly a kids' store. I guess so.

 

[KNWVIKING]

I don't think so PG. We were in a DS a week or so ago and the CM we talked to was very excited about the new line of products they were getting in - child and adult. The stores are getting away from the plush, they'd had a big selloff - 75% discounts - and had virtually no plush in the store. She said her store was one of the ones being left open and it was going to be redecorated/themed. She seemed very up-beat about the future of the stores even if they were sold to TCP.

 

[mitros]

I hope so. I was in NJ 3 weeks ago, and the DS in Menlo Park mall was a sad shell of it's former glorious self. I asked one of only 2 CMs in the store and she told me that they had laid a lot of people off, but they weren't saying anything to CMs about what was actually going to happen. She seemed genuinley said about the situation. AND, they only had one rack of adult shirts. Going to the DS at one time was like going to an extension of WDW. Since the remakes, they look like discount stores, having gotten rid of all the great moving displays and such. I'm going back ti NJ in a couple of weeks, I'll see if anything has changed.

 

[goofy370]

I am a cast member at the store in Freehold New Jersey. We have gotten in alot of new adult shirts and products for adults. We have nightmare before christmas shirts, plush, tealight holders. We also got in some cool halloween candy bowls, lights, and a mickey tealight holder. That is just the tip of the iceberg!! We are so excited when shipment comes in with all the new goodies!!!!

 

[mitros]

I sure hope this is the light at the end of the tunnel. It would be great to have the old Disney Store back again!

 

[mb20fn26]

I was hired as a lead manager at The Disney Store in my mall. I haven't seen any of these changes that have been talked about in this thread. We still carry just as much plush as before. Our adult section includes pj's, shirts, jackets, ets.....
It's possible that we haven't been affected by this...

 

[JimmyMartin]

It's official. Disney stores sold to The childrens place

 

[tenaseewalker]

Yep!!! Sold to the Children's Place.... They will announce it publicly in the next couple of days

 

[Planogirl]

Oh well, let's look on the bright side. The Disney Store was a disappointment to many for quite a while now and maybe the Children's Place will improve it. And also maybe having the Disney Store will improve the outlook for the Children's Place.

That is assuming that the Disney Store will remain the Disney Store.

 

[tenaseewalker]

I've heard they're gonna close all The Diseny Stores but the 3 best ones here in Michigan

 

[RweTHEREyet]

Originally posted by Planogirl
Oh well, let's look on the bright side. The Disney Store was a disappointment to many for quite a while now and maybe the Children's Place will improve it. And also maybe having the Disney Store will improve the outlook for the Children's Place.

That is assuming that the Disney Store will remain the Disney Store.

Sorry, but I don't think there is a bright side for those of us Cast Members that work for The Disney Store.

 

[Lammy85]

I am a cast member at our local Disney Store and when I work tonight I will let you know all the specifics of the buy out and what is expected with this sale. My concern is what happens to our park perks? Bye Bye I bet. 27 days and counting All Star Music here I come YIPEE!!!!!!

 

[Planogirl]

Originally posted by RweTHEREyet
Sorry, but I don't think there is a bright side for those of us Cast Members that work for The Disney Store.

That is definitely harder.

I wish the CM's all the best.