Disney Sells Retail Chain to Children’s Place

Oct 20, 2004  •  Post A Comment

In a move that had been widely anticipated for more than a year, The Walt Disney Co. on Wednesday struck an agreement to sell its retail chain, inking a deal with Children’s Place Retail Stores for an undisclosed sum.

While Children’s Place refused to say how much it paid for the 313-store Disney Store North America chain, it said it has pledged to invest up to $100 million to upgrade and expand the stores.

As part of the transaction, Children’s Place will acquire the equity of Disney Store North America in exchange for a working capital adjustment payment to Disney at the deal’s close. Children’s Place will finance the acquisition using cash and short-term borrowings. There are no plans to issue long-term debt or stock to complete the deal, which is expected to close by year-end.

Disney Store North America will operate under the same name but as a subsidiary of Children’s Place and will bear responsibility for the store-lease obligations and for paying royalties to Disney beginning in year two of the contract. The Disney Store chain also will enter into a long-term deal with Disney to sell Disney products.