Children's Place about to sell back two-thirds of Disney Stores

Children's Place is in promising talks with The Walt Disney Company for Disney to regain ownership of two-thirds of Disney Stores in North America.

Photo: Children's Place about to sell back two-thirds of Disney Stores

The Children’s Place Retail Stores Inc. is a specialty retailer of children’s apparel and accessories for children from newborn to age ten.

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.

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 kept in check consumer spending. Excluding items such as asset impairment charges, the company earned $20.5 million, or 70 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.

Children's Place shares were up 9.7 percent at $21.50 in trading before the opening bell.

The Children’s Place Retail Stores Inc was founded in 1969. They became publicly traded on the NASDAQ exchange in 1997 under the ticker symbol PLCE. The Children’s Place is headquartered in Secaucus, New Jersey and currently has 5,000 full-time employees. The company owns and operates the Children’s Place stores, as well as Disney Stores – which they acquired in late 2004. Fiscal 2005 marked the first full year The Children's Place had managed the Disney Store. As of June 2007, the company owned and operated 872 The Children's Place stores and 328 Disney Stores throughout North America, Canada, and Puerto Rico.

The Children’s Place designs, contracts to manufacture, and sells high-quality, value-priced products under ‘The Children’s Place’ and ‘Disney Store’ brand names. The merchandising objective of the brand is to offer a unique, colorful, coordinated and balanced lifestyle assortment of high quality, basic and fashion merchandise, at prices that represent substantial value to their customers. Or, as their slogan states 'Big Fashion. Little Prices'. Each Children’s Place store is divided into six sections, serving the needs of specific size ranges. These are: Big Girls and Big Boys (4-14), Baby Girls and Baby Boys (6 months-4T), and Newborn (0-12 months).

Most of The Children’s Place stores are located in and around regional malls, but also include some strip centers, outlets, and street stores. Almost all the Disney Store locations are within regional malls. The majority of their stores are small, traditional mall stores, although some Children's Place outlets are in a big box format.