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NEWARK, N.J. - Children's Place Retail Stores Inc. is ready to let the Walt Disney Co. take back control of about two-thirds of the 335 stores in the Disney Store chain.
About 115 remaining stores were expected to close. Disney handed ownership of the chain to Children's Place in November 2004 with an agreement that Children's Place would pay royalties after two years.
Stock in both companies rose following the announcement Thursday from Secaucus, N.J.-based Children's Place, which currently owns and operates 335 Disney Stores, in addition to 904 Children's Place stores. Shares in Children's Place surged 13.5 percent to $22.25, while Disney shares rose 2.1 percent to $31.90.
Children's Place said it is in an "advanced phase of discussions" with Disney on how Disney would regain ownership and control of the stores. Children's Place intends to disclose plans for exiting the stores "in the very near term."
Disney confirmed the talks, and said the Disney Stores "can be an important extension of the 'Disney' brand."
In an interview, Gary Foster, senior vice president of Disney Consumer Products, said the talks centered on about two-thirds of the Disney Store chain in the U.S. and Canada.
"We believe that a smaller, more focused chain would be more economically sustainable and still cover the major markets that we would like to have a Disney-branded outpost in," he said.
If the talks succeed, the North American Disney Store operations would be added to the 120 Disney Stores that Disney operates in Europe, and 40 it licenses in Japan.
Orlando Sentinel
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