Children's Place Misses Disney Store Renovation Deadlines

[Figment!]

Children's Place Misses Disney Deadlines

Associated Press
8/24/2007

The Children's Place Retail Stores Inc. said Thursday it missed several deadlines to remodel and refresh numerous stores in the Disney Store chain and expects to miss more deadlines. Shares tumbled in premarket trading.

Under a long-term license agreement with Walt Disney Co. (nyse: DIS - news - people ), Children's Place operates the Disney Store retail chain in the U.S. and Canada. On June 8, Children's Place agreed to an amended license deal that included a timetable to renovate and upgrade hundreds of Disney stores.

The discussions began after Disney said Children's Place failed to comply with some terms for the agreement, including obligations for renovation and maintenance.

Children's Place said it has been unable to meet several of the deadlines in the remodeling timetable. The company also said it has identified various deadlines during the third and fourth quarters of fiscal year 2007 that it is likely to miss.
Shares of Children's Place dropped $4.52, or 13.7 percent, to $28.50 in premarket action.

The company said it is in talks with Disney to postpone the due dates of some of the remodeling obligations. In consideration for the changes, the companies have also discussed additional changes to the original license agreement, including allowing Disney to relocate its flagship store in Manhattan.

The companies are also considering altering the agreement so that Disney's ability to grant direct licenses to other specialty retailers to sell Disney merchandise will apply only to specialty retailers of children's merchandise.

Children's Place said there is no guarantee that its talks with Disney will result in an agreement or deferment of its remodeling obligations.

Until an amended agreement is signed, Children's Place said it will be in breach of the June letter agreement, which allows Disney to demand remedies or cancel the license deal altogether.

The breach also constitutes a cross-default under the secured credit facility for the Disney Store chain, which entitles lenders to exercise their contractual remedies.

[DizneyRox]

Is it me, or does it sound like Children's Place really doesn't care all that much? It's almost as if they want to dump the stores...

Maybe it's the way it's written, but the following quote:

Children's Place said it will be in breach of the June letter agreement, which allows Disney to demand remedies or cancel the license deal altogether.

It just sounds like they are saying, well, we broke the contract so now if you want, go ahead and cancel the contract. This way they don't have to spend any money remodeling and it sounds like they don't intend on spending the money in the third and fourth quarters either.

Very strange, but I always thought CP didn't know what they were getting into anyway.

[brownie]

I wouldn't be surprised if they made the agreement knowing they couldn't or wouldn't make the deadlines.

I miss the old Disney Store, with all its variety of merchandise for everyone and the feeling that this was sort of like being at Disney World. I know our local Disney Store has gotten even worse since Children's Place took over. They're always running sales (what does that say about the value of what you are offering?) and the store is not as neat and orderly as it used to be.

[magicman]

I miss the old Disney Store, with all its variety of merchandise for everyone and the feeling that this was sort of like being at Disney World. I know our local Disney Store has gotten even worse since Children's Place took over. They're always running sales (what does that say about the value of what you are offering?) and the store is not as neat and orderly as it used to be.

Agreed. I used to feel like it was a miniature version of a Downtown Disney Store. Now I feel like it is an outlet for getting rid of overstocked items.

[crazeedizneefinatic]

Can't agree more. We used to make the Disney Store a must stop when at the mall (when Disney owened it). I could care less now. I find myself staying away lately. The stores are horrible! There are very few things for my son. The entire half of the store is girls clothes and toys. The other half is a hodge podge of Power Rangers and Cars. There is never anything new. The adult stuff is hard to come by too. I think they have been selling the same 12 shirts for the past year. I hope they do lose their agreement. Maybe Disney will realize what a mistake they made.

[tinkwest]

Visited the Disney Store for the first time in years just last week. I quit going because I was so disappointed in the merchandise being offered. I walked in and felt nothing. Looked around for a minute or two and left knowing I hadn't been missing anything.

The original concept was great. The stores were always busy and you could buy everything from a $5.00 Mickey Mouse coin bank to Annual Passports. I always went there to purchase new movies even when I knew I could save a few bucks at Target. It was just fun to go to the Disney store. That feeling is completely gone now. What a shame.

[Ian]

I'm really not 100% certain how the Disney Stores got so off track. The original concept was great and, if memory serves, pretty profitable.

But then, as Disney seems wont to do with every successful "franchise", they started to beat us over the head with them. IMO, a Disney Store in every mall was never a good idea. I think that was the beginning of the end.

They also really shot themselves in the foot by letting all these other retailers sell their merchandise (many times for less money). That part makes zero sense to me. If you know you're going to sell x hundred million DVD's, why share the profits with someone else??

[Crow]

I'm really not 100% certain how the Disney Stores got so off track. The original concept was great and, if memory serves, pretty profitable.

But then, as Disney seems wont to do with every successful "franchise", they started to beat us over the head with them. IMO, a Disney Store in every mall was never a good idea. I think that was the beginning of the end.

They also really shot themselves in the foot by letting all these other retailers sell their merchandise (many times for less money). That part makes zero sense to me. If you know you're going to sell x hundred million DVD's, why share the profits with someone else??

pretty much agree w all. i havent bought anything there for yrs. walk in and spend only a few min.
i hope the World of DIsney DD doesnt get that bad....although i havent really bought anything there either my last few trips.

[PirateLover]

I remember when I was little, the Disney Store was such a magical place to me. It was big, it was fun, there were towers of stuffed animals and so many little interesting things that it was worth it to look around the entire store. I remember specifically for about 3 years (1st -3rd) grade my mom would take me there to get these awesome pencil cases. Actually they were more like a pencil box. They were themed to the movies (B&B, TLM) and had little buttons for secret compartments where you put erasers, paper clips, pencil sharpener...whatever. So cool! Now when I walk in there I feel so uninspired. I usually just take a look at the stuffed animals or the snow globes and leave. Nothing else appeals to me, especially in the smaller ones that don't even have coffee mugs and adult clothing.

[mm59]

The stores are now a shell of what they were. They have let them run down and it is a junk store now.

[Figment!]

Children's Place Modifies Disney Remodel Schedule

Reuters
August 31, 2007

NEW YORK- Children's Place Retail Stores Inc said on Friday it has modified its license agreement with Walt Disney Co and will be remodeling two more stores than planned.

The company also said it will not be filing its annual report with the U.S. Securities and Exchange Commission today as expected, and is requesting additional time.

Children's Place, which runs the Disney Store chain, has agreed to remodel 236 existing stores, two more than the previous agreement, but pushed back its 2007 and 2008 deadlines to finish the remodels.

Children's Place said it does not expect the change to impact its fiscal 2007 earnings guidance

[John]

I'm really not 100% certain how the Disney Stores got so off track. The original concept was great and, if memory serves, pretty profitable.

But then, as Disney seems wont to do with every successful "franchise", they started to beat us over the head with them. IMO, a Disney Store in every mall was never a good idea. I think that was the beginning of the end.

They also really shot themselves in the foot by letting all these other retailers sell their merchandise (many times for less money). That part makes zero sense to me. If you know you're going to sell x hundred million DVD's, why share the profits with someone else??

Two words - Paul Pressler.

[glenpreece]

I hate the fact that the Disney Stores are oned by TCP. I really wish they'd default and go back to Disney. I can't stand working there now (mostly because of my boss) and refuse to work anymore than my required Per diem shift.When I worked last I was hard pressed to find anything for myself. I got my brother some shirts for our upcoming trip but only the Flora, Fauna and Merriweather plush for myself.

[SteveL]

I hate the fact that the Disney Stores are oned by TCP. I really wish they'd default and go back to Disney. I can't stand working there now (mostly because of my boss) and refuse to work anymore than my required Per diem shift.When I worked last I was hard pressed to find anything for myself. I got my brother some shirts for our upcoming trip but only the Flora, Fauna and Merriweather plush for myself.

Then why do you punish yourself? It can't be because you need the money. The required one four hour shift, every 90 days, can't possibly put that much in your wallet.
This seems to be a no-brainer: quit!

[mermaidmarian]

They also really shot themselves in the foot by letting all these other retailers sell their merchandise (many times for less money). That part makes zero sense to me. If you know you're going to sell x hundred million DVD's, why share the profits with someone else??

I was just talking about this after our trip last month. I have two t-shirts (tink and a pirate) that I bought over the last year for 9.99 each at WalMart. I thought, "OK, I really like the graphics on each, but they're probably not WDW quality product." Imagine my surprise when, last month, I am searching for a new t-shirt (or 5 ) and (a) I cannot find anything on property that is as appealing to me as these aforementioned WalMart Disney tee's and (b) when I "did" find a tee I really "had" to have, it was/is indistinguishable from the product that I bought for 9.99 at WalMart, save for the price tag, which was $28.00. Label looks exactly the same, etc.

Now I KNOW that the WalMart shirts have to be in some way inferior to the Official WDW product, but I sure can't figure it out. I'll still keep buying the $28.00+ product on trips to WDW, I can't stop myself - but I am sure other people have much stronger wills to hold onto their money. It does seem like a really dumb move by Disney, although I guess I do understand the intent to keep putting the brand in front of the consumer and building a loyal consumer/fan base, even from those people who would never get to WDW.

[Tekneek]

If you know you're going to sell x hundred million DVD's, why share the profits with someone else??

Here is my theory...

Somebody made a beautiful PowerPoint presentation about how opening it up would increase revenues and brand recognition, with the belief that people bought directly from Disney/Disney Stores out of brand loyalty and were not shopping based on price. Operating from that position, it seems like a "no-brainer" (pun intended, perhaps?) to open it up and cash in on brand shoppers (Disney loyalists who will buy anything Disney direct from Disney at whatever price Disney sets) AND price shoppers (looking for prices in line with other comparable products and will buy less or not at all outside of that).

[mermaidmarian]

Two words - Paul Pressler.

"sigh"
He and Cynthia Harriss did so much for Disney. And then went on to do so much for The Gap.
As a child, my mother always reminded me, "with friends like that, who needs enemies".

[glenpreece]

Then why do you punish yourself? It can't be because you need the money. The required one four hour shift, every 90 days, can't possibly put that much in your wallet.
This seems to be a no-brainer: quit!

LoL it doesn't put any money into my wallet because I have to turn around and spend it there when I do get my pay. I really do want to quit but I love my discount and still want to transfer when Oshawa opens. But with all the renos that have to happen it seems that any new stores are getting pushed back even furthur.

[SteveL]

Working there as a Per Diem is a pretty good gig. One shift every 90 days. 30% discount at DS and CP, and also Disneyshoppingdotcom.
I probably wouldn't have gone back except now I have a grandaughter and another grandchild on the way. DW loves shopping for her, and I'm sure it will double when the new one comes along.

[Iluvpooh]

Our local Disney Store is falling apart!! The carpet is ducted taped down in spots where it is pulling up and the large TV quit working last year and still hasn't been fixed. Again they will have new merchandise and 2 months later I can go back and get it for $3.99. I just go in to get Disney Dollars and now I hear they will stop selling those-so no reason for me to go in anymore especially since they are doing disneystoredotcom now.