US: Children's Place to remodel 234 Disney stores
The Children's Place Retail Stores Inc is to remodel 234 of the Disney Stores it operates in North America into a new format as part of an agreement to end an ongoing dispute with The Walt Disney Company.
The two companies settled their differences on Friday (8 June) after months of negotiations following Disney's accusation that The Children's Place committed material breaches of its licensing agreement.
Under the agreement, 234 existing Disney Stores will be remodelled into a new store prototype by the end of fiscal 2011.
The first nine remodels, which will include two stores bearing the 'Mickey' format, will be completed during the second half of fiscal 2007.
In addition, at least 18 new Disney Stores using the new store prototype will be opened by the end of fiscal 2008.
The Children's Place has also agreed to complete a "maintenance refresh" programme in around 165 Disney Stores, including the flagship store located on Michigan Avenue in Chicago, by no later than 30 June 2008.
The remodel and refresh programmes will cost $175m between now and the end of fiscal 2011 the companies said in a statement.
"We are pleased to have come to an understanding with The Walt Disney Company," said Ezra Dabah, chief executive officer of The Children's Place Retail Stores.
"We are committed to executing on this important remodel programme which will contribute to our goal of elevating the guest experience.''
However, Disney can require Children's Place to pay an $18m penalty if it makes three or more violations, and terminate the license agreement on five or more violations.
The Children's Place bought the Disney Store chain in 2004 for $101m, and promised to invest up to $100m in the business. Disney, though, later asserted the company had failed to comply with some of its obligations under the license agreement, including store renovation and maintenance.
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