Disney potentially buying back Disney Store(s)

[GrumpyFan]

This made the news today across several outlets.

This could potentially be a good thing for Disney. I always thought it was a mistake for them to sell/turn it over in the first place. There's no reason why the stores can't be profitable for Disney, if properly run and managed.

from Reuters -
Children's Place to exit Disney chain, posts loss

Retailer Children's Place (PLCE.O) on Thursday said it is in advanced talks with The Walt Disney Company for Disney to regain ownership of two-thirds of Disney Stores in North America.

Disney confirmed it was talking about potentially buying back a portion of the Disney Store chain, which Children's Place has operated under a license.

"Given the challenging macro-economic environment, we believe the steps we are taking today, while difficult, will put The Children's Place in position to realize its full potential," Chuck Crovitz, interim chief executive officer of The Children's Place Retail Stores Inc, said in the earnings release.

Children's Place also on Thursday posted a net loss for the fourth quarter, compared with a year-ago net gain, hurt mostly by one-time charges regarding their exit of the Disney Store North America chain.
The company reported a quarterly net loss of $58.5 million, or $2.01 per share, compared with a net profit of $44.7 million, or $1.48 per share, a year earlier.
While Children's Place posted a net gain when one-time items are excluded, they still fell short of analysts' average estimates as a tough economic environment crimped consumer spending. Excluding items such as asset impairment charges, the company earned $20.5 million, or 70 cents a share. Analysts polled by Reuters Estimates had expected 89 cents a share.

The company said it recognized a pretax asset impairment charge of $80.3 million in the fourth quarter of fiscal 2007, related to exiting the Disney store. The company said it plans to cut 80 positions from its shared services work force.

Children's Place said consolidated comparable sales for all its stores in the fourth quarter rose 3 percent, while the Disney Stores comparable sales fell 4 percent.

Apart from the charges, Children's Place said a tough economic environment and high inventory hurt earnings.

Crovitz said he anticipates sales will increase in the mid-single digits in 2008, driven in part by 30 new store openings in the latter part of the year.

"By any measure, fiscal 2007 was a very tough year for our company. For the majority of the year, our merchandise assortments ... did not resonate with the consumer and our inventory levels were too high, particularly given the challenging economic environment," Crovitz said.
Children's Place shares were up 9.7 percent at $21.50 in trading before the opening bell.

(Reporting by Kristina Cooke; Editing by Steve Orlofsky and Maureen Bavdek)

[GrumpyFan]

On a side-related note. I've always felt like they should have a kiosk in the larger Disney stores with a vacation planner there. I think it would be a great idea if they had someone there at least part of the day or maybe just on weekends who could answer questions about the parks and cruises, and help with planning and booking vacations. They already sell tickets in the stores, why not have someone there who could "sell" the stuff even better?

They could also, push/sell the DVC like they do in the parks.

[DizneyFreak2002]

I hope this is true... Disney Stores have been selling junk since Children's Place took over... Hopefully the quality of merchandise goes up once Disney takes over again....

[SurferStitch]

It would be nice to see Disney get the stores back, but I have to say that the couple stores I've shopped at over the last year have had beautiful women's and men's clothing. High quality, nicely designed and more modern styles. I've gotten beautiful hoodies, jeans, tees, skirts and purses. I've also gotten beautiful Tink statues, and some really nice canvas artwork.

[Magic Fanatic]

On a side-related note. I've always felt like they should have a kiosk in the larger Disney stores with a vacation planner there. I think it would be a great idea if they had someone there at least part of the day or maybe just on weekends who could answer questions about the parks and cruises, and help with planning and booking vacations. They already sell tickets in the stores, why not have someone there who could "sell" the stuff even better?

They could also, push/sell the DVC like they do in the parks.

I have to disagree. These stores have been performing poorly for years, even before the Childrens Place stepped in. Adding additional staffing to for vacation planning and pushing DVC would just another added expense with little return. Instead, why not save that additional expense and go back to what worked originally with these stores. Sell QUALITY MERCHANDISE and get back into the collectables and art (NO I DON"T MEAN SNOWGLOBES). My wife recently purchased a set of 8 very nice looking drinking glasses. The quility is so poor that the painting around the glass rubs off on your fingers (yes, the label said they were dishwasher safe). I have to say that many times you will find that there is better quality Disney licensed merchadise at Wal Mart than there is at the Disney Store.

[Crow]

I hope they change from Disney clothing store, to a Disney store again.
I did see them going downhill before the sale. the other day i walked in for 2 min & walked out. only a few snowglobes, 1 rack of DVDs/Cds
the rest clothes or toys that didnt look too great.
I miss seeing a lithograph or 2. etc
Of course if Disney buys them back they may just become a Bibbidi Bobbity.

[GrumpyFan]

I have to disagree. These stores have been performing poorly for years, even before the Childrens Place stepped in.

The problem (IMHO) is they were not managed properly before. They were out of touch with customer demand, and the brand has been over-sold to other places so much that buying Disney mercahndise at other places was more economical. They also had too many stores. It should be an exclusive/limited experience with a store in only a few select, larger locations.

I really believe that if they manage the stores and sell exclusive items that cannot be found elsewhere and that are in line with customer demand, they will be successful.

[Tinkerfreak]

The problem (IMHO) is they were not managed properly before. They were out of touch with customer demand, and the brand has been over-sold to other places so much that buying Disney mercahndise at other places was more economical. They also had too many stores. It should be an exclusive/limited experience with a store in only a few select, larger locations.

I really believe that if they manage the stores and sell exclusive items that cannot be found elsewhere and that are in line with customer demand, they will be successful.

I agree with all of this 100%. Why would I pay more money for the same thing or similar thing at Walmart or Target or any other chain store. I used to love wearing something unique that I had purchased at the Disney Store. I also used to order from their website alot but once they changed everything there I just didn't find much to buy anymore.
I used to go in and spend an hour in the store. Now I am in and out in 5 minutes because I rarely find anything. I also wish they carried more plus sized clothing.
As far as the tickets go, the emplyees I have met know very little about the parks and packages. In fact I knew more. There was a time I was in there and a customer asked a question and the clerk had no idea how to answer or even who she should ask. When the clerk saw me (they know we well there) she asked me and I told the woman what she needed to know and directed her to Disneys website and of course here. I'm not saying that all Disney Store employees have to be experts and know all the answers but they should at least be able to direct customers to the Disney Website.

[cvzdesign]

And they need to adjust the prices properly on videos.
Why would I go pay $29 for a video at the Disney Store when I can get the same exact one at Target or WalMart for $15 ?

If they sold ones at the stores that you couldn't get anywhere else, then the premium price would be justified.

[Ian]

I'm going to be honest ... with the way Disney currently has their merchandising configured, I don't see much of a need for the Disney Store chain.

The truth is, Disney has so many other retail outlets pushing their merchandise and doing it in a lower cost environment that the idea of buying from Disney Stores as it used to exist is obsolete. You can buy Disney branded clothing, movies, toys, and whatever else at Target, Wal-Mart, Sears, and just about any other retail outlet with a pulse. Why go to the Disney Store and pay more for the same thing?

The reason the Disney Store concept worked initially was because it was like the only place you could go, outside of their theme parks, to purchase good Disney branded merchandise. Then Pressler decided to pimp all their junk merchandise out to anyone who would be willing to push it on people. They've completely devalued their brand from a retail perspective and there's no way that low margin, must-be-sold-on-clearance inventory can sustain a niche store chain like TDS.

The only way they can recover is to pull their stuff off of all the other retailers' shelves and go back to being the sole distribution network for their products. They also need to return to selling quality merchandise. I'm not necessarily sold on the idea that they have to go back to selling expensive collectables and all that, but they definitely need to do away with all the nickel and dime, made in China junk they peddle today.

[bmj721]

There was a time long ago when one walked into a Disney Store (when they weren't so plentiful) that it felt as if one had just traveled to WDW. The CM's were well educated about everything Disney, not glorified checkout people. The items in the store were true treasures unlike anything we could find here in Indiana. The whole experience made one crazy to get on a jet and fly to Florida so this incredible place could be seen. (Understand that I was 28 yrs before I went to WDW.) After the Children's Place bought the stores it slowly evolved into a fleamarket quality bargain basement focusing mostly on children under the age of 8. Very discouraging.
I have great hopes. I like the ideas that others have expressed of not only quality merchandise, but also education of CM's on all things Disney and even DVC. These stores could be a very effective extension of Disney.

[GrumpyFan]

I'm going to be honest ... with the way Disney currently has their merchandising configured, I don't see much of a need for the Disney Store chain.

The truth is, Disney has so many other retail outlets pushing their merchandise and doing it in a lower cost environment that the idea of buying from Disney Stores as it used to exist is obsolete. You can buy Disney branded clothing, movies, toys, and whatever else at Target, Wal-Mart, Sears, and just about any other retail outlet with a pulse. Why go to the Disney Store and pay more for the same thing?

The reason the Disney Store concept worked initially was because it was like the only place you could go, outside of their theme parks, to purchase good Disney branded merchandise. Then Pressler decided to pimp all their junk merchandise out to anyone who would be willing to push it on people. They've completely devalued their brand from a retail perspective and there's no way that low margin, must-be-sold-on-clearance inventory can sustain a niche store chain like TDS.

The only way they can recover is to pull their stuff off of all the other retailers' shelves and go back to being the sole distribution network for their products. They also need to return to selling quality merchandise. I'm not necessarily sold on the idea that they have to go back to selling expensive collectables and all that, but they definitely need to do away with all the nickel and dime, made in China junk they peddle today.

AMEN! Preach it brother!

Hopefully, under the new management (non-Eisner/Pressler) they can take some of this to heart and maybe learn why the stores failed in the first place. Otherwise, they're doomed to fail again.

[GrumpyFan]

As far as the tickets go, the emplyees I have met know very little about the parks and packages. In fact I knew more. There was a time I was in there and a customer asked a question and the clerk had no idea how to answer or even who she should ask. When the clerk saw me (they know we well there) she asked me and I told the woman what she needed to know and directed her to Disneys website and of course here. I'm not saying that all Disney Store employees have to be experts and know all the answers but they should at least be able to direct customers to the Disney Website.

We've experienced similar things at our local store, and helped "educate" both Castmembers and store guests. They know us in a similar fashion, and whenever we're in the store they ask when we're going back. It's kinda funny, and cool.

[KylesMom]

Interestingly enough, I participated in a 20-minute survey directly from Disney yesterday regarding Disney shopping versus shopping for Disney-related products at other chain stores. I purchase two-thirds of my merchandise online now instead of through the retail outlet (never can find anything at the retail level anymore). It seems the DS at our local mall sells a bunch of junk and items targeted for small children. I used to buy stuff weekly from our local mall store!

[sillyolbear]

Perhaps they should take a step back and learn from the American Girl franchise. A few stores that are destination shops giving the ability to command a premium price and they are packed. I even have friends who plan vacations around a visit to one of their stores.

[Roger's #1 Fan]

The other thing that has changed with TDS (at least in my area) is the theming. There used to be character/sets/theming that made the shopping experience immersive and fun. The reconfigured stores are very vanilla and stark. That along with a bunch of low quality merchandise has kept me out of the store for years now.
Another poster mentioned the BBBotique idea and I think that would be a great way for them to re-enter the market by rethemeing some of the stores with this concept. My 2 DD's (5 & 9) love Libby Lu and would definitely be asking to go to a BBB if it were in the mall.

[dan24]

I live in Oklahoma.. and the disney store here .. is basically full of stuffed animals and childrens clothes.. they have no selection what so ever..I mean i know it wont be as great as the world of disney store at the park.. but a little better selection would be nice

[DizneyRox]

Antoher one of those I told you so moments. I didn't think that CP would be able to make it work. The first few years, they were exempt from the licensing fees and therefore had an easier time of it. Now that the honeymoon is over, it's obviously a lot harder than they thought!

CP never had a chance, the deal with TWDC was stacked in Disney's favor. Disney often does this and by the time the other party figures out what Disney knew all along, it's too late for them.

It's interesting how a lot never really got transitioned over to CP. They never took ownership of DisneyStore.com which is HUGE in today's online marketplace. And I bleieve they never had control of the merchandise they would actually sell! It was always approved by Disney.

I will say, they held on longer than I thought. it's been three or four years now? I didn't think they would make it to year two.

[JMTStone]

On a side-related note. I've always felt like they should have a kiosk in the larger Disney stores with a vacation planner there. I think it would be a great idea if they had someone there at least part of the day or maybe just on weekends who could answer questions about the parks and cruises, and help with planning and booking vacations. They already sell tickets in the stores, why not have someone there who could "sell" the stuff even better?

They could also, push/sell the DVC like they do in the parks.

I love this!

[Jasper]

The connecting thread that seems to be running through all your posts is that it doesn't really matter who owns the stores as long as they create a unique shopping experience that can't be had elsewhere, especially at a lower price. So my question is this - we all understand this principal but does Disney? If they don't "get it" then buying back the stores will just be a losing venture!