Children's Place settles Disney dispute

SECAUCUS, N.J. The Children's Place Retail Stores announced today that it has settled a dispute with The Walt Disney Company in which Disney alleged that The Children's Place committed numerous material breaches of its long-term license agreement to operate the Disney Store retail chain in North America.

"We are pleased to have come to an understanding with The Walt Disney Company," said Ezra Dabah, ceo of The Children's Place Retail Stores. "We are committed to executing on this important remodel program which will contribute to our goal of elevating the guest experience."

Under the terms of the settlement, The Children's Place has agreed to, among other things, remodel a total of 234 existing Disney Stores into a new store prototype being developed by the company, 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. The company is required to remodel at least 67 additional Disney Stores, 33 of which will be "Mickey" stores, into the new store prototype by the end of fiscal 2008 and to remodel an additional 53, 70 and 35 Disney Stores during fiscal 2009, 2010 and 2011, respectively. In addition, by the end of fiscal 2008, the company will open at least 18 new Disney Stores using the new store prototype.

As previously announced, the company's board of directors has committed $175 million of capital to fund the remodel and refresh programs described above between now and the end of fiscal 2011.

The settlement with Disney follows a strong May for The Children's Place. The company reported yesterday that sales for the four-week period ended June 2 were $127.6 million, an increase of 13% compared to sales of $112.7 million for the four-week period ended May 27, 2006. Consolidated comparable-store sales increased 4% compared to last year's 16% increase.