According to the company, Children’s Place and its subsidiaries that run the Disney Stores business, Hoop Holdings and Hoop Holdings Canada, are “actively pursuing alternatives for immediately implementing the exit from the DSNA business”.
Discussions are currently underway with a view to Disney regaining ownership and control of approximately two-thirds of the existing Disney Store locations. Disney has confirmed it is in discussions to take over from 200 to 230 Disney Stores from Children’s Place.
Children’s Place's decision came after “a thorough review of the operation, its potential for earnings growth, its capital needs and its ability to fund such needs from its own resources,” according to a company statement. The divestiture of those Disney Store locations could cost the company between $50 million and $100 million in pre-tax cash exit costs.
Children’s Place was licensed by Disney in 2004 to operate the more than 300 Disney Stores in operation at the time in North America in exchange for $100 million investment in the stores, plus royalties.