Mickey Gets Out of Retail

Oct 21, 2004
George Anderson

By George Anderson

The parent of the successful Children’s Place chain announced yesterday it has reached an agreement to buy Disney Stores.

Children’s Place Retail Stores Inc. hopes to close the deal to acquire 313 North American retail stores from Walt Disney Co. by November. The company has said it plans to invest $100 million in upgrading and expanding the Disney Store units.

“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,” said Ezra Dabah, chairman and chief executive officer of The Children’s Place. “The Disney Store North America profile is strikingly similar to that of The Children’s Place: the chain is a mall-based, vertically integrated specialty retailer, with a comparable customer demographic. Disney Store North America generates high sales productivity, driven by significant customer traffic. 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.”

The details of deal’s terms have not been disclosed but Children’s Place has said it will not to take on any long-term debt to finance its acquisition.

Margaret Whitfield, retail analyst at Ryan Beck & Co, was enthusiastic about the deal. She told Reuters, “It looks like a home run. It sounds like they have numerous opportunities to improve the business.”

“With store closings at KB, as well as potential closings at Toys R Us, this will be a destination for parents, as well as kids,” she added.

Moderator’s Comments: What is your reaction to this deal?

Mario Ciampi, senior vice president of store development and logistics for The Children’s Place, has been appointed president for Disney Store North America.
He will report directly to Mr. Dabah.

George Anderson – Moderator

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