"We are pleased to have come to an understanding with the WaltDisney Co.," CPRS Chief Executive Ezra Dabah tendered in a Fridayrelease announcing the settlement. "We are committed to executingon this important remodel program, which will contribute to ourgoal of elevating the guest experience." The purveyor of children'smerchandise was violating an intricate agreement made in securingthe retail division, according to Disney, which also won the rightto peddle products to other retailers and via alternative meanssuch as the Internet.

A prototype known as the "Mickey" format will be incorporatedinto most existing stores no later than the end of FY 2011,including nine remodels this fiscal year. The timetable calls for67 to be overhauled in FY 2008, 33 in the "Mickey" mode, followedby completions of 53, 70 and 35 units in subsequent years. Eighteennew Disney Stores must be added by the end of FY 2008, the pactstipulates.

CPRS agreed to other significant changes, among them cedingroyalty relief for "non-core" Disney stores; allowing theentertainment kingpin to grant direct merchandising agreements toother specialty retail store chains; and implementing a so-called"maintenance refresh" program to yield immediate results in 165Disney Stores, among them the flagship location on Michigan Avenuein Chicago. That program needs to be complete in 12 months.Failureto comply to the licensing modifications could cost CPRS $18million initially, and the loss of the licensing dealaltogether.