Pending approval of the US Bankruptcy Court, the parties expect to complete a transaction by April 30. Children's Place executives said during a conference call that it will cost between $50 million and $100 million to exit the Disney Store business and there will be more clarity on those charges once the deal closes.
Children's Place took over the Disney Store chain in 2004. It acquired Disney Store's equity from the Walt Disney Co. in exchange for a $101-million working capital payment.
Children's Place had recently rolled a out a new Disney prototype, but it was proving too costly to hold on to the chain, said Chuck Crovitz, Children's Place CEO. "The equation simply does not balance out in this environment," Crovitz said.
During its most recent quarter, Disney Stores sales were $227.5 million, flat from the previous year, while same-store sales fell 4%. Children's Place, which operates 906 of its namesake stores, reported a $58.5-million loss during the fourth quarter.
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