The Walt Disney Co. (Lake Buena Vista, Calif.) has announced it will lay off 140 employees from its Disney Store division (Glendale, Calif.) as it readies for a sale of its retail operations.
The company had announced last month that it wants to pare down the 380-store chain — part of a plan to make it more attractive to potential buyers. A spokesman said the cuts will come from every department of the Disney Stores' California headquarters. “We've been reducing the number of stores for the last year or so from a high of 550 to 380 today,” he added. “We'll continue to close unprofitable stores in the near future and are trying to align the number of staff to match the number of stores.”
Once the contraction is complete, Disney hopes to shed the stores, which some analysts say have lost money in what they see as an oversupplied marketplace. Warner Bros. (Burbank, Calif.)experienced the same difficulties in 2001, when it folded its Studio Stores division and exited the retail business. Seeing the latter's difficulties, an analyst said Disney might not have an easy task in shopping the chain.
If a deal materializes, the Disney spokesman said the remaining work force would likely stay in place to continue to run the stores. “There's a good likelihood, depending on the buyer, that they'll want to keep the knowledgeable staff onboard,” he said. “It's hard to speculate, but if a new ownership took over, they'd probably transfer the payroll over.”