Disney says it may sell ailing retail stores in North America, Europe
Friday, May 23rd 2003, 12:00 am
News On 6
LOS ANGELES (AP) _ The Walt Disney Co., already facing economic challenges at its theme parks and ABC television network, said it may sell its chain of retail stores in North America and Europe.
``We are very optimistic we can actually find a buyer'' if the company decides to sell the Disney Store chain, Disney Consumer Products Chairman Andy Mooney said Thursday.
The company has been closing its least profitable stores over the last few years. The number of North American stores has dropped from 522 to 387 and further closings are expected, Disney said.
In preparation for a potential sale, Peter Whitford, who was hired to run the store chain in 2001, has resigned and other executives will lose their jobs over the next few weeks as Disney looks to control costs, the company said. Mooney will run the stores on an interim basis.
Shares of Disney were up 24 cents to $18.12 at the end of regular trading Thursday on the New York Stock Exchange.
Disney said it is considering selling the North American and European stores to a retail specialist who would run them and pay Disney a royalty. The company has yet to hire an investment bank to solicit bids, according to Gary Foster, a spokesman for Disney Consumer Products.
Last year, the company sold its stores in Japan to Oriental Land Co., the same company that runs Tokyo Disneyland. The sale resulted in a net pretax gain of $34 million.
Disney launched the chain in 1987 to sell dolls, videos, mugs, and other items based on characters such as Mickey Mouse and Winnie the Pooh. There are 548 stores worldwide, including 47 in Japan, six in Hong Kong, and stores in London, Paris and other major European cities. They employ 12,000 people.
Profits have been steadily declining and Disney has been experimenting with new layouts, new product mixes and other strategies to reinvigorate the chain. Ultimately, the company concluded it did not have the capital and expertise to succeed.