While a new Disney Store prototype has been well received,returns are too long-term and capital outlay too high to remain inthe business, explained Chuck Crovitz, Children's Place interimCEO.

|

"The equation simply does not balance out in this environment,"Crovitz said.

|

Children's Place and The Walt Disney Company have confirmed thatthey are in advanced discussions for Disney to acquire two-thirdsof the chain's 335 stores in North America. Crovitz declined tooffer specifics about the remaining stores, other than to emphasizethat it will exit the Disney business.

|

"The company believes the Disney Stores can be an importantextension of the 'Disney' brand and, with the improved economicsprovided by a smaller store footprint, could add value to thecompany in the promotion and monetization of its growing number ofrobust franchises," Disney said in a press release.

|

The move is one of several strategic initiatives Children'sPlace is undertaking to return to profitability, which alsoeliminating 80 jobs (partially related to Disney), discontinuingplans for a new headquarters and cutting its namesake storeexpansion from 54 new units last year to 30 new stores this year.Most stores will open in the third quarter as it explores the mostcost-efficient ways to roll out a new prototype. The chain alsoplans 17 renovations.

|

For the quarter, sales were $670.9 million, up 4% from theprevious year. Consolidated comparable store sales increased 3%.The chain posted a loss of $58.5 million compare with earnings of$44.7 million for the same quarter last year.

|

For the year, sales were $2.2 billion, up 7% from the prioryear. Comparable store sales rose 2%. The company reported a netloss of $59.6 million, compared with net income of $87.4 millionlast year.

|

Children's Place owns and operates 904 Children's Place storesand 335 Disney Stores in North America.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.