More Children's Place/Disney Store News

[Lori in CNY]

Disappointing news in the Children's Place financial world:

Children's Place launches review of Disney stores Kira Bindrim
Published: January 11, 2008 - 1:53 pm

The Children’s Place Retail Stores Inc., which has seen its sales suffer because of lagging growth at Disney stores, has hired a consultant to review potential options for the brand.

Investors remained wary of the news. Shares of the retailer tumbled to a four-year low, shedding as much as 15.9% to a $15.79 Friday morning. The stock was still down 9.8% in afternoon trading.

Secaucus, N.J.-based Children’s Place, which on Thursday reported a 1% decline in same-store December sales, said at the same time that it had hired an unnamed consultant to review options for Disney stores.

While same-store sales at Children’s Place brand stores rose 1% to nearly $200 million for the month of December, sales at Disney brand stores fell over 5% to $114.7 million.

But a pricey licensing deal could make it difficult for the Children’s Place to do much. Under a long-term agreement, the retailer must invest $175 million to remodel 234 Disney sores over the next five years, a big promise from a company that in November reported a 70% drop in third-quarter profits.

In August, Children’s Place said it was unable to meet “several” of the remodeling deadlines and sought a postponement of some of its obligations from Disney.

To complicate matters, Children’s Place is up against a litany of internal issues -- auditor Deloitte & Touche ended its affiliation in October, and a lawsuit charged executives with making misleading statements to shareholders. The company also ousted former Chief Executive Ezra Dabah in September and president Neil Goldberg resigned last month.

 

[Cheshire Figment]

Maybe repossession? But this time have people with Disney Merchandise experience run them instead of The Gap.

 

[EUROPACL]

...beginning of the end.

 

[ILuvDVC2]

Maybe repossession? But this time have people with Disney Merchandise experience run them instead of The Gap.

Huh? Are you talking about Paul Pressler and all the Disney people that went to the Gap with him?

 

[Cheshire Figment]

No, I mean people who have come up through the Disney ranks and not people brought in from outside companies. That was the way The Disney Store started out.

 

[llmurphy17]

I wonder how much of the comp sales decrease is Disney related since almost all the retailers are experiencing a first time low in comp sales. It may just be the economy. At the outlet center near me the Childern's Place store has low customer traffic while the Disney store is packed.

 

[agnes!]

I was just at Potomac Mills Mall (huge discount/outlet mall in Woodbridge VA, off of I-95). The kids I saw there were all excited to see and to go in the Disney Store (Outlet) - happy, laughing. Squealing with delight when they spotted it. And the DS Outlet re-do is quite nice and the personnel were wonderful with multiple returns. Kept on thanking me for my patience.

I sure didn't see any kids who were thrilled to go into The Children's Place. Oooooooo, now that's fun.

The Disney Store is for kids (and the 'kid' in all of us). The Children's Place is for mommies.

Slightly OT, but, I always get good customer service at almost all of the Potomac Mills Mall stores I like...Tommy Hilfiger's, Nordstrom Rack, Disney Store + a few others. I think they're better than many stores at so-called 'regular' malls. Anymore I'd rather go to Potomac Mills than Springfield or even Pentagon City.

agnes!

 

[diz8297]

Well, I haven't been in a Disney Store in about 3 years. Keep in mind that my DH and I used to spend hundreds if not thousands of dollars there a year. Now, the products are not what we are interested in......and yes we have children. Disney really messed up a good thing. In fact for the first time in years, I didn't have anything Disney to open under the tree because our last trip to the World was in April. I miss the old stores!!

 

[ILuvDVC2]

No, I mean people who have come up through the Disney ranks and not people brought in from outside companies. That was the way The Disney Store started out.

Got it. I was dismayed when I heard Disney had decided to sell the DS to CP and license Disney product to them. CP knows nothing of creating a guest service experience, IMHO. Given all the financial troubles CP is having these days, and the fact that they missed deadlines on key parts of the agreement they made with Disney when they purchased the stores, I'm not surprised they are exploring giving up the stores. I doubt there would be takers, unless a foreign-owned company decided to come into the picture. It's been the trend in retail chain sales lately, so I wouldn't be too shocked if that happens.

 

[dismorgh]

My DW and I are both huge Disney fanatics, and I had to shop at Disneyshopping.com for any adult merchandise. We have several Disney stores here in San Antonio, and not one of them really caters to older clients at all anymore. Used to be we could go into a store, and easily find merchandise for us to buy (and boy, did we ever!) Hopefully, Disney will take these back over.

 

[DancingBear]

My DW and I are both huge Disney fanatics, and I had to shop at Disneyshopping.com for any adult merchandise. We have several Disney stores here in San Antonio, and not one of them really caters to older clients at all anymore. Used to be we could go into a store, and easily find merchandise for us to buy (and boy, did we ever!)

Yeah, but those days ended before Disney sold the stores to TCP.

 

[remain seated please]

I managed Disney Stores during their biggest decline (when Disney owned them). During my tenure I saw the number of stores dwindle from over 700 to nearly 300. The decline of TDS was/is entirely Disney's fault for a variety of reason.
1. They promoted Paul Pressler and Cynthia Harris to the parks. Paul and Cynthia were amazing at TDS, but were not proper "fits" for the parks. Disney failed to replace them with equal or greater talent.

2. Licensing. Disney got greedy and over-licensed their product to any retailer who would take it. Thus saturating the market and lowering the perceived value of TDS. In fact, the saturation made TDS appear to be too expensive with guests balking at prices and going elsewhere to get what they thought was the same thing for less.

3. Gap management. Bob Bell and others were brought in to save the company. They achieved the opposite. So did lower-level Regional Directors and District managers who came from retailers like Pottery Barn, Williams Sonoma, Victoria Secret and others and did not know or appreciate the Disney name or product.

There are many other reasons for the decline of TDS. But The Children's Place is not one of them. TCP bought this struggling chain when nobody else would. The chain was on the block for a year with no serious offers. TCP's intentions were good, but it couldn't save TDS. Too much damage was already done. Here's what I think should happen.

1. TCP needs to let go of TDS before it brings them down even more.
2. All of the "typical" mall-type Disney Stores need to be closed down.
3. Disney should increase it's number of WOD stores to include a limited number of high traffic tourist locations such as Vegas, Chicago and San Francisco.

I am sorry to say that the time for TDS to go the way of the Warner Bros. Stores came and went more than 5 years ago. Nothing else can or should be done to save them. Let them fade away now, before they become more of a joke than they already are.

 

[mickeyluv'r]

I dunno about other areas, but TDS in our area sees lots of kids. I think what they need to do is to make them more of a destination. Kind of like the princess party theme - only spare us the same princesses over again.

If the stores offered some kind of interactive experience - like a virtual roller coaster, Hannah Montana singing contests...somethign like that - to make them more of a destination. Remember how exciting the visuals in the store were when they first opened? They should rotate the animated displays - not keep the same ones for ten or more years.

Another thing - why would I pay $20 for a DVD at TDS (and get a few lame prints) when I can buy it everywhere else for less - AND get better extras?

 

[mattsdragon]

I was just at Potomac Mills Mall (huge discount/outlet mall in Woodbridge VA, off of I-95). The kids I saw there were all excited to see and to go in the Disney Store (Outlet) - happy, laughing. Squealing with delight when they spotted it. And the DS Outlet re-do is quite nice and the personnel were wonderful with multiple returns. Kept on thanking me for my patience.

I sure didn't see any kids who were thrilled to go into The Children's Place. Oooooooo, now that's fun.

The Disney Store is for kids (and the 'kid' in all of us). The Children's Place is for mommies.

Slightly OT, but, I always get good customer service at almost all of the Potomac Mills Mall stores I like...Tommy Hilfiger's, Nordstrom Rack, Disney Store + a few others. I think they're better than many stores at so-called 'regular' malls. Anymore I'd rather go to Potomac Mills than Springfield or even Pentagon City.

agnes!

That's cause us Dale City folk know how to treat people.

 

[remain seated please]

I dunno about other areas, but TDS in our area sees lots of kids. I think what they need to do is to make them more of a destination. Kind of like the princess party theme - only spare us the same princesses over again.

If the stores offered some kind of interactive experience - like a virtual roller coaster, Hannah Montana singing contests...somethign like that - to make them more of a destination. Remember how exciting the visuals in the store were when they first opened? They should rotate the animated displays - not keep the same ones for ten or more years.

Another thing - why would I pay $20 for a DVD at TDS (and get a few lame prints) when I can buy it everywhere else for less - AND get better extras?

Interactive experiences in retail stores don't work because they are too expensive. In the case of TDS, there is also not enough space in those stores for such a thing. While they are great fun for the kiddies, they don't add to the bottom line because most people would just play the game or whatever and then leave. Even charging a small fee would not pay for the amount of space the thing would take up.

The same thing applies to the decor. Those fixtures and animated displays are supposed to be permanent. Again, it would cost too much to replace them every couple of years. Retail stores are about making money. The decorations in the stores don't sell the products.

The DVD thing at Disney has always bothered me. It seems that paying the extra for a "free" lithograph is no longer worth it. It was okay when everyone was charging the same for the dvd's but I'd rather get my dvd's at Best Buy, WalMart or Costco. Screw the "freebies".

 

[shirley 38]

I was a Cast Member for 10 years at a high volumn Disney Store. The first five years were the best.

At peek holidays we would have 50 Cast Members. We would have private cell showings. People would buy cells that were worth ithousands of dollars.

We had Character visits, Mickey, Minnie, Buzz Lightyear, etc etc.

We also carried all the collectables, watches, jewelry, Golf Clubs, Expensive and Casual clothes
Who would not want to come into a store like this.

Disney wanted you to go to Disneyworld to purchase these items.

All was taken away. I left after Children Place took over.

It breaks my heart to see what has happened to the true "DISNEY STORES"

 

[TheDisneyGirl02]

I still work for my Disney Store, and I still believe in the stores. Yes, Disney abandoned us and basically left us for dead after they pretty much drug us down, but so far we've survived. I hate to say it, but this holiday season was slower for all of the retailers, not just the Disney Stores. I remember reading an article on CNN.com on my cell phone Thanksgiving morning about the lack-luster says that were expected for the holiday season and how retailers were already creating a game plan to try to combat it.

We have MANY new things at the Disney Store that is helping to bring it back to way the it used to be. No artwork (cells) or expensive watches and Classics Pieces, but we are getting adult clothing back in and we even now how a Pete's Dragon snowglobe. We also had a very successful line of dinner plates and accessories over the holidays. Now we have a Mickey themed wall clock, tea kettle, kitchen timer and a set of mixing bowls. It doesn't sound like a lot, but it's a lot more than what we had before.

The infant department is also starting to make a comeback. The plush that we have gotten in over the last couple of months is new and exciting - we had Huey, Dewey and Luey for a while and now have some characters from Robin Hood. We have trading pins back in the stores, also which are increasingly popular as word spreads that they are back.

I know that there are many people who will still dislike the Disney Stores even if Disney would buy us back. I'm not exactly sure why. What I can tell you is that if you come into my Disney Store, you will receive a Disney experience.

 

[stepnut]

Interesting thread...I love business stories.

If TCP owns and operates TDS with licensing permission from Disney, who owns and operates all the retails shops at WDW itself? Like the enormous Disney store in DTD? Or MouseGear in Epcot?

 

[remain seated please]

If TCP owns and operates TDS with licensing permission from Disney, who owns and operates all the retails shops at WDW itself? Like the enormous Disney store in DTD? Or MouseGear in Epcot?

TCP has owned TDS since 2004. Prior to that, TDS was a Disney business unit that was ran by Disney Consumer Products. All of the stores at the parks are operated by the theme park unit. It gets confusing to some because so many peopple think the World of Disney store is a "Disney Store" which it is not, nor has it ever been. You mentioned it yourself in your own post. I hear it all the time. In fact, on the travel channel last month when Samantha Brown was doing her special from WDW, she did a segment at the WoD store and called it the biggest Disney Store in the world. I'm really surprised Disney didn't catch that because they never wanted WoD or any of their theme park retail stores to be associated with Disney Store. And that has been the case ever since TDS was created in 1987.

To the CM who still works for TDS today. Your loyalty to Disney is a bit blind. You admit that TDS is no longer Disney, but still hold on to a dream that Disney abandoned almost ten years ago. It's very sad because Disney doesn't want or need your loyalty. They just want your money. Your post was well-intended, but it was also an advertisement for the new products at your store. You have been beaten down by Disney and your spirit should surely be broken. Yet you still find a way to defend the Mouse and talk about a come back. Most other companies would welcome such loyalty. It wouldn't hurt you to start exploring your options in the next few months and jump ship before it sinks.

 

[stepnut]

I'm really surprised Disney didn't catch that because they never wanted WoD or any of their theme park retail stores to be associated with Disney Store. And that has been the case ever since TDS was created in 1987.
.

I don't understand this. Why would Disney NOT want any association with a vendor that distributes products with thier name? Isn't that the reason for a licensing agreement...in part to protect the integrity of the name? Association would be critical in terms of some oversight. And isn't there some financial benefit to Disney in such an agreement? Again, association would be on paper in the bottom line.

I'm not a business expert, but this stuff is interesting to me.

Who runs MouseGear at Epcot? Is that run by some merchandising dept at Epcot, or is it at a higher corporate level that runs all the theme park shops?