CP Renews Disney Pact, Asks Nasdaq for Time

SECAUCUS, NJ-Facing a two-front battle, Children’s Place Retail Stores Inc. has signed an amendment to a reconstruction agreement with the Walt Disney Co. regarding its running of the Disney Store chain, and at the same time has asked the Board of Directors of the Nasdaq Stock Market to grant additional time to file financial reports. The Disney document will allow CP to continue the operation, and agreed renovation, of the Mickey Mouse-themed stores. For the Nasdaq situation, CP asked if it could have until today to file reports, though the board could de-list the company’s shares.

As reported by GlobeSt.com last week regarding the company’s dismal second quarter results, CP has defaulted on agreements and deadlines to remodel Disney stores, reportedly for about $175 million. The company officials said it would not be able to hit targets of remodeling nine stores by the end of the year, and 67 more stores by January 2009. In total, CP had promised it would remodel 234 stores by 2011. The company officials blamed circumstances beyond their control, such as store landlord permission disputes, for the missed deadlines.

Now, the new agreement allows CP to only have to remodel seven stores by the end of the year and 49 more by January 2009, but adds two more stores that the company must refurbish by 2011. Also, Disney also won concessions such as the relocation of its flagship store in Manhattan, and giving the Orlando-based company the ability to sell its merchandise to stores that cater to adults, though CP will still have the exclusive children-only store sales. The company owns and operates 883 CP stores and 328 Disney stores in North America.