Ian Ritter is national online editor of GlobeSt.RETAIL.
SECAUCUS, NJ-Retailer the Children's Place is buying the 313-unit Disney Store North America chain in a deal the companies have been publicly considering since June. In May 2003 Disney said it would either sell the chain or close its stores.
The locally based Children's Place will spend an initial $50 million to fund the renovation of the Disney Stores and will begin to pay the Burbank, CA-based Walt Disney Co. royalties on the second anniversary of the closing's transaction.
Company officials say they expect the deal to close by the end of the year. The Children's Place will also pay up to an additional $50 million in store remodeling and operations costs. "We believe their commitment to quality, the Disney brand and entertainment retailing will maximize the Disney Store opportunity," says Peter E. Murphy, EVP and chief strategic officer of the Walt Disney Co., in a statement.
Children's Place plans to expand the chain into malls, as well as lifestyle and power centers, says company chairman and CEO Ezra Dabah. The will also implement a strategy "that will include more frequent product flows."
Disney Store North America will become a wholly owned subsidiary of the Children's Place and will be responsible for lease obligations. In October 2005 Children's Place plans to launch an e-commerce site for the venture, though the Walt Disney Co. will continue to operate its catalog and own on line retail presence.
Mario Ciampi, SVP of store development and logistics for the Children's Place, will become president of Disney Store North America when the deal closes. Ciampi has led Children's Places' expansion into Canada and Puerto Rico. The company currently operates 725 stores.
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