Disney hopeful of US stores sale
Talks with Children’s Place continue
Walt Disney hopes to complete the sale of its 330-strong US Disney Store chain to Children’s Place Retail Stores early next year.
The entertainment group, which has been in negotiations with Children’s Place since June, gave an update on the progress of the talks with its third quarter sales figures.
Disney confirmed that letters of intent have been exchanged with the potential buyer. Disney said that while “a number of issues remain open to negotiation and a number of conditions would need to be satisfied if an agreement is reached, the company currently believes it is likely that an agreement for the sale of the chain could be completed in the first quarter of fiscal 2005.”
The company did not say whether there has been any progress on sales talks for the European stores, which includes the UK chain. Disney was reported to have been in talks with at least two potential buyers, with negotiations stalling over the level of control Disney would want to keep over areas such as merchandise, marketing and branding.
Disney’s strategy is to exit operating all but a handful of its own stores in favour of working more closely with other retailers to sell Disney-branded merchandise.
Across the quarter, Disney’s consumer products turnover increased 9 per cent to $541m, with operating income up to $76 from $39m a year ago, The improved performance reflected cost savings from the closure of underperforming stores, with around 200 in the US and Canada having been shut.
[img r]disneypowerrangers.jpg[/img]There was also an improvement in licensing revenues, including a strong performance by Power Rangers licenses in Europe.
