I remember reading a thread not too long ago about the loss of that perk (seems it happened just after the stores were put up for sale).
Disney close to selling stores
Children's Place would acquire the chain and also pay Disney licensing fees under the proposed deal.
By Richard Verrier
Sentinel Staff Writer
June 4, 2004
A possible buyer has emerged for Walt Disney Co.'s specialty stores in North America a year after the media company put its money-losing retail chain up for sale.
Children's Place Retail Stores Inc. of Secaucus, N.J., said Thursday that it was in talks to buy 323 Disney Stores in the United States and Canada. Children's Place operates 711 specialty clothing and accessories stores for children, newborn to 10.
The companies are in advanced talks and could consummate a deal during the next several weeks, though they haven't yet signed a letter of intent, according to a source close to the negotiations.
Under the deal being discussed, Children's Place would own the stores, and Disney would receive a licensing fees based on a percentage of sales.
That would be similar to the arrangement Disney has with Oriental Land Co., the operators of Tokyo Disneyland that bought the Disney Store chain in Japan in 2001.
Disney spokesman Gary Foster confirmed the talks but would not comment on them.
Analysts have estimated that Disney could pocket as much as $500 million for the North American chain, excluding 105 outlets in Europe. Efforts to sell the stores in Europe stalled after two bidders withdrew.
Disney said last May that it wanted to sell the unprofitable chain and hired Bear Stearns Cos. and Goldman Sachs Group Inc. to help find buyers. Until recently, "they were having a tough time coming up with somebody to buy them," said Tom Wolzien, an analyst with Sanford C. Bernstein & Co.
Disney will keep its store in midtown Manhattan as well as stores at its theme parks and on its studio lot in Burbank, Calif.
Founded in 1987, the Disney Stores have been among the most visible symbols of the company, selling toys and clothing featuring the image of Mickey Mouse, Winnie the Pooh and other Disney films characters.
Over the last several year the stores have struggled from overexpansion, a failure to respond quickly to changing trends and a falloff in demand for merchandise.
To stem losses, Disney has shuttered or sold about 300 stores.
Children's Place would face a daunting challenge in turning the stores around, given the intense competition from mass retailers and the size of the operation, analysts said.
"They just got way too big for their own good. There are still way too many" Disney Stores, said Marty Brochstein, executive editor of the Licensing Letter, a New York-based industry newsletter. "The best merchant in the world could operate them, and there would still be an issue."
For the four-week period ended May 29, Children's Place posted total sales of $57.2 million, up 18 percent. Total sales for the 17-week period ended on the same date rose 23 percent to $283 million, while comparable-store sales rose 14 percent.
