FINANCE

Disney Store Operator Files Bankruptcy

BY CSA STAFF

Secaucus, N.J. The Children’s Place Retail Stores Inc. said late Wednesday that the company’s subsidiary that operates the Disney Store chain has filed for bankruptcy protection as part of its previously announced plan to exit the Disney Store business and focus on its core brand.

The Chapter 11 filing by the subsidiary, Hoop Holdings LLC, does not apply to the parent company.

The Children’s Place said last week that it planned to let 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.

In a written statement Wednesday, Chuck Crovitz, interim CEO of The Children’s Place, said the company concluded that “the cost of running the Disney Store was no longer an acceptable use of (the) company’s resources” and that the filing would “enable the company to transition away from the Disney Store business in an orderly and expeditious manner.”

The Disney Stores recorded an operating loss of $92.1 million for the three months that ended Feb. 2 and $107.3 million for the fiscal year.

Gary Foster, a spokesman for Disney Consumer Products, said Wednesday that the filing was “not unexpected.”

“From a Disney perspective, the negotiations are still ongoing,” he added.

The Children’s Place, a specialty retailer of children’s merchandise, operates more than 900 Children’s Place stores.

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Pep Boys posts 4Q sales loss

BY CSA STAFF

PHILADELPHIA The Pep Boys announced that sales for the fourth quarter ended Feb. 2 were $517.6 million, as compared to the $578 million recorded for the fourth quarter ended February 3, 2007. Excluding the 14th week of fourth quarter 2006, comparable-merchandise sales decreased 4.4% and comparable-service revenue decreased 1%.

The company reported a fourth quarter net loss of $18.5 million, or 36 cents per share – basic and diluted, from net earning of $7.9 million, or 15 cents per share – basic and diluted, for the same period last year. According to Pep Boys, the net loss included $8.5 million of margin reductions related to the exiting of non-core merchandise, $6.2 million in store closure costs and $6 million in debt pre-payment costs.

Sales for the fiscal year ended Feb. 2 were $2.14 billion as compared to the $2.24 billion recorded last year. Excluding the 53rd week of 2006, comparable-merchandise sales decreased 4.2% and comparable-service revenue increased 1.8%.

Net loss increased from $7.07 million, or 13 cents per share – basic and diluted, to  $37.4 million, or 72 cents per share – basic and diluted. 

President and ceo Jeff Rachor commented, “While the difficult economic backdrop created sales challenges during the fourth quarter, we are pleased to confirm that our progress to date leaves us well positioned to complete this first important step in our strategic plan by the beginning of the second quarter of this year.

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ALDI launches ‘smart’ ad campaign

BY CSA STAFF

NEW YORK ALDI has launched a new television campaign in the United States.

The four commercials center on the themes of “musical,” “soccer mom,” “extended family” and “dinner party.” Each one presents a different scenario, i.e. shopping for a big family, or putting together the perfect dinner party, and ties into the ALDI motto of “shopping smart.”

The commercials can be viewed on ALDI’s Web site.

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