Though acknowledging that business at its theme parks, particularly after September 11, has had a lot to do with the company's stock plummet in 2001, Walt Disney Co. chairman Michael Eisner told shareholders yesterday that his plan to get back on track would include the closing of 50 more Disney stores.
The multi-media entertainment company that had more than 600 North American stores in fiscal 1997 will likely end fiscal 2002 with roughly half that amount.
In a letter to Disney stockholders, Eisner acknowledged Disney's weak performance but claimed the entertainment empire is “poised for a rebound.” The announcement caused Disney stock to gain 67 cents yesterday, to $22.12, but it's still off 30 percent over the last 12 months.
Disney's major cost-cutting efforts in 2001 included reduction of some 4000 positions, mainly at its theme parks. Its plans to shutter 50 stores caps off an earlier effort that hit 51 stores.
Not only has theme park attendance shriveled, but Disney's ABC TV network has slipped to fourth place in the ratings race this season and its biggest hit, “Who Wants to Be a Millionaire,” has been flagging. “The reality line is, they haven't had earnings growth in the last six years,” said one analyst.