Children's Place to buy US Disney Stores
Disney hands chain over to retailer Entertainment giant Walt Disney is signalling its exit from retail with a deal to sell its US Disney store chain to retailer The Children's Place.Following several months of negotiations, Children's Place has agreed to acquire the 313 store chain and operate them under a long-term licensing arrangement.
Ezra Dabah, chairman and chief executive of The Children's Place, said: "This exciting and unique opportunity gives us instant access to one of the most magical brands in the world, and is consistent with our goal of being the leading retail player in the newborn to age 10 category.
"We believe that by utilizing our merchandising and sourcing expertise and leveraging our infrastructure we can further increase the level of profitability and build on the chain's positive momentum."
Disney has been looking for an exit from its retail arm for some time, concentrating instead on partnership with established retailers to develop its brands. The group is known to have also held talks with several potential buyers of its European chain.
Peter Murphy, senior executive vice president and chief strategic officer of The Walt Disney Company said: "The Children's Place management team has a proven track record of growing a unique and compelling retail concept. We believe their commitment to quality, the Disney brand, and entertainment retailing will maximize the Disney Store opportunity. We look forward to a long and rewarding relationship with The Children's Place."
The deal gives Children's Place the exclusive right to operate the Disney Stores in the United States and Canada under a long-term license agreement. The Disney Store North America will continue to manufacture and sell merchandise featuring Disney-branded characters, and will begin to pay royalties to Disney on sales after two years. It also plans to launch an online Disney Store next year.
Children's Place has committed to invest up to $100m on remodeling and upgrading the operations of the chain.
Mario Ciampi, senior vice president of store development and logistics for The Children's Place, will become president of the Disney Store North America.
Dabah said: "Mario Ciampi is a proven leader and we fully expect his leadership and experience to translate into long term success for the Disney Store business. Over the past 13 years Mario has played a pivotal role in building and growing The Children's Place, including spearheading our successful expansion into new markets like Canada and Puerto Rico."
Andy Mooney, chairman of Disney Consumer Products, said: "The sale of the Disney Store North America marks another step in the ongoing refocusing of Disney Consumer Products' resources and expertise toward growing our core character franchises such as Mickey and developing new and exciting character franchises such as Disney Princess and W.I.T.C.H.
disneypoohbear.jpg""We will continue working with all our retail partners and licensees, including the Disney Store, to optimally showcase Disney's character franchises to consumers of all ages across all channels of distribution. The current management team's success in improving the performance of the Disney Stores over the last year should serve as a platform for The Children's Place to continue growing and improving the Disney Store business."
Dabah said: "By combining the Disney brand with our retail expertise, we believe we can increase sales, produce significant margin expansion and leverage operating expenses - resulting in increased earnings power for our shareholders."
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