This was in our local paper today:
Disney stores may be sold
Published in the Home News Tribune 5/24/03
By NICOLE MORELLA
GANNETT NEW JERSEY
Disney stores may change ownership, but the name customers know and the plush Mickey Mouses kids love to hug are not going away anytime soon, especially from Central New Jersey malls.
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.
According to Disney's Web site, the company has two stores in Central Jersey: the Bridgewater Commons and the Menlo Park Mall in Edison. The chain also has a store in the Woodbridge Center.
The
Disney Store has been a long-time tenant at the Bridgewater Commons. Mall general manager and vice president Janell Vaughan said she hoped that the transition to a new owner would be seamless to customers and knew whoever would buy the chain is sure to be reputable.
"Anything that Disney is going to put their name on is a first class operation," Vaughan said.
Although the company has been closing its least profitable stores over the last few years -- and expects to close more Disney spokesman Gary Foster said none of the three New Jersey stores are closing at this time. The number of North American stores has dropped from 522 to 387.
"We've been closing the stores that have been not been meeting our financial goals. We will continue to do that and would do that even if we had decided not to seek a possible buyer," he said.
One possible reason for the downturn the Disney Stores are experiencing is because they are a special occasion store, said Ted Kraus, a retail consultant with TKO and the Dealmakers in Mercerville.
By that, Kraus means parents are more likely to buy Mickey Mouse ears for their children when they are in Disney, rather than at the mall down the street from their house.
"When you are in Orlando and you are with your family, you have with you total disposable money," he said. "When you are in Menlo Park Mall, you are not in an entertainment mode, you are in a shopping, living, paying your bill mode."
Disney Consumer Products Chairman Andy Mooney said "we are very optimistic we can actually find a buyer if the company decides to sell the Disney Store chain."
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 Foster.
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.
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.
