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Reuters
Disney plan to sell stores, Ducks presses forward
Friday March 12, 3:45 pm ET
By Jeffrey Goldfarb and Peter Henderson
NEW YORK/LOS ANGELES, March 12 (Reuters) - Walt Disney Co. (NYSE
IS - News) is plodding ahead with plans to sell two money-losing units -- its Disney Stores and its Anaheim Mighty Ducks hockey team -- despite the distractions of an unwanted takeover bid and a revolt by unhappy shareholders.
Both auctions stalled last month to varying degrees, but the iconic media and entertainment company continues to hold discussions with prospective buyers, people familiar with both situations said.
The two divisions on the block have different problems, but they both share the ignominious distinction of weighing on Disney's earnings. The stores lose as much as $50 million a year, according to analyst estimates, while the Ducks lose about $20 million.
Still, one person familiar with the situation said that after a brief hiccup related to Comcast Corp.'s (NasdaqNM:CMCSA - News) $47 billion unsolicited takeover bid, Disney is back on track reviewing options for its stores and it expects to make an announcement by May, as originally planned.
The unprofitable North American chain of about 335 stores still has "at least one" serious bidder, this person said, and "advanced talks" are going on with multiple bidders for the profitable European stores, which number about 100.
Disney Chief Executive Michael Eisner, who recently was removed as chairman, offered shareholders no buoyant news about the 10-month effort to sell the stores, which the company estimated last May would take up to a year.
In response to an investor's question at the company's annual meeting earlier this month, Eisner said, "The general body of stores across America have been up for sale, and if we can find an appropriate buyer who will maintain the quality of the Disney brand, live within our license agreement, which requires very strong attention to details, we will sell them."
Eisner pledged never to close the store on Fifth Avenue in midtown Manhattan. That store is excluded from the auction, along with the stores at the Disney theme parks and one on its studio lot in Burbank, California.
The stores, which draw more visitors each year than Disney's renowned theme parks, have improved financially in recent quarters with the remodeling of some, the closure of others and the success of Princess, Kim Possible and Finding Nemo merchandise.
"We continue to be pleased with the progress in pursuing options to sell the Disney Stores, but as we have said all along we will keep all options open, including keeping the stores or closing them," said Gary Foster, spokesman for the consumer products division.
Most of the North American stores are in malls, however, where shopper traffic has plummeted. Mall-based retailers accounted for just 19 percent of total retail sales in 2002, down from 38 percent in 1995, according to a study conducted by Customer Growth Partners.
"The mall space is under a great deal of pressure and it is likely to become worse as time goes by," said Kurt Barnard, head of consulting firm Retail Forecast Group. "There will be more consolidations, there will be more closings."
As for Disney and the disposition of its stores, he said, "They have much bigger problems at the present time."
Although Philadelphia-based Comcast has signaled its interest in keeping the stores should it succeed with a Disney takeover, it could not keep the Anaheim Mighty Ducks because it already owns the Philadelphia Flyers, and the National Hockey League prohibits ownership of more than one team.
Sports bankers said any prospective buyer for the Ducks likely will wait to see how the situation plays out before submitting too high or too firm a bid.
"It could wind up being a fire sale depending on the Comcast situation," said one banker, who requested anonymity.
Other drags on the auction include the disarray in professional hockey, which faces financial problems and a glut of teams for sale. Two teams filed for bankruptcy protection last year, and the relationship between the league's owners and players is volatile, with a lockout by the owners possible next season.
"We are currently in discussions with several interested parties," said Michele Nachum, a Disney spokeswoman. She declined to comment further.
After reaching the Stanley Cup Finals last year -- and narrowly losing to the New Jersey Devils in a seven-game thriller -- the 11-year-old expansion Ducks have a losing record this season and could miss the playoffs altogether.
Disney sold its Anaheim Angels baseball team last year to former billboard magnate Arturo Moreno for about $180 million.
(Additional reporting by Tom Johnson in New York and Emily Kaiser in Chicago)
Nothing really new here. But i was wondering since someone says the aquisition of the Muppets was a good move cause it put the company at a higher value makingit bigger and harder to buyout doesnt selling off the Disneystores and the Ducks make it easier for a buyout?
Disney plan to sell stores, Ducks presses forward
Friday March 12, 3:45 pm ET
By Jeffrey Goldfarb and Peter Henderson
NEW YORK/LOS ANGELES, March 12 (Reuters) - Walt Disney Co. (NYSE
IS - News) is plodding ahead with plans to sell two money-losing units -- its Disney Stores and its Anaheim Mighty Ducks hockey team -- despite the distractions of an unwanted takeover bid and a revolt by unhappy shareholders.Both auctions stalled last month to varying degrees, but the iconic media and entertainment company continues to hold discussions with prospective buyers, people familiar with both situations said.
The two divisions on the block have different problems, but they both share the ignominious distinction of weighing on Disney's earnings. The stores lose as much as $50 million a year, according to analyst estimates, while the Ducks lose about $20 million.
Still, one person familiar with the situation said that after a brief hiccup related to Comcast Corp.'s (NasdaqNM:CMCSA - News) $47 billion unsolicited takeover bid, Disney is back on track reviewing options for its stores and it expects to make an announcement by May, as originally planned.
The unprofitable North American chain of about 335 stores still has "at least one" serious bidder, this person said, and "advanced talks" are going on with multiple bidders for the profitable European stores, which number about 100.
Disney Chief Executive Michael Eisner, who recently was removed as chairman, offered shareholders no buoyant news about the 10-month effort to sell the stores, which the company estimated last May would take up to a year.
In response to an investor's question at the company's annual meeting earlier this month, Eisner said, "The general body of stores across America have been up for sale, and if we can find an appropriate buyer who will maintain the quality of the Disney brand, live within our license agreement, which requires very strong attention to details, we will sell them."
Eisner pledged never to close the store on Fifth Avenue in midtown Manhattan. That store is excluded from the auction, along with the stores at the Disney theme parks and one on its studio lot in Burbank, California.
The stores, which draw more visitors each year than Disney's renowned theme parks, have improved financially in recent quarters with the remodeling of some, the closure of others and the success of Princess, Kim Possible and Finding Nemo merchandise.
"We continue to be pleased with the progress in pursuing options to sell the Disney Stores, but as we have said all along we will keep all options open, including keeping the stores or closing them," said Gary Foster, spokesman for the consumer products division.
Most of the North American stores are in malls, however, where shopper traffic has plummeted. Mall-based retailers accounted for just 19 percent of total retail sales in 2002, down from 38 percent in 1995, according to a study conducted by Customer Growth Partners.
"The mall space is under a great deal of pressure and it is likely to become worse as time goes by," said Kurt Barnard, head of consulting firm Retail Forecast Group. "There will be more consolidations, there will be more closings."
As for Disney and the disposition of its stores, he said, "They have much bigger problems at the present time."
Although Philadelphia-based Comcast has signaled its interest in keeping the stores should it succeed with a Disney takeover, it could not keep the Anaheim Mighty Ducks because it already owns the Philadelphia Flyers, and the National Hockey League prohibits ownership of more than one team.
Sports bankers said any prospective buyer for the Ducks likely will wait to see how the situation plays out before submitting too high or too firm a bid.
"It could wind up being a fire sale depending on the Comcast situation," said one banker, who requested anonymity.
Other drags on the auction include the disarray in professional hockey, which faces financial problems and a glut of teams for sale. Two teams filed for bankruptcy protection last year, and the relationship between the league's owners and players is volatile, with a lockout by the owners possible next season.
"We are currently in discussions with several interested parties," said Michele Nachum, a Disney spokeswoman. She declined to comment further.
After reaching the Stanley Cup Finals last year -- and narrowly losing to the New Jersey Devils in a seven-game thriller -- the 11-year-old expansion Ducks have a losing record this season and could miss the playoffs altogether.
Disney sold its Anaheim Angels baseball team last year to former billboard magnate Arturo Moreno for about $180 million.
(Additional reporting by Tom Johnson in New York and Emily Kaiser in Chicago)
Nothing really new here. But i was wondering since someone says the aquisition of the Muppets was a good move cause it put the company at a higher value makingit bigger and harder to buyout doesnt selling off the Disneystores and the Ducks make it easier for a buyout?
