After Home Depot, Disney Next To Close 100 Stores

Burbank, CA (AHN) - A day after Georgia-based Home Depot announced plans to shut down 15 stores across the nation due to sagging sales, it was the turn of Walt Disney Thursday to disclose similar plans for 98 stores in the U.S. and two in Canada.

Along with the shutdown of the 100 Disney stores, Walt Disney would take over the Disney Store chain in North America from the Children's Place Retail Stores. The deal would cost Children's Place %50 million to exit operations on top of its losses estimated somewhere between $50 million to $100 million.

The agreement is part of Chapter 11 proceedings against Hoop Retail Stores and Hoop Canada, which are subsidiaries of Children's Place. The two firms filed for bankruptcy on March.

Chuck Crovitz, temporary chief executive of Children's Place, quoted by the Washington Post, said, "For the Children's Place, we can again focus exclusively on building our core namesake brand and driving the business forward."

He added, "For Hoop, the transfer of the DSNA business back to Disney maximizes the return to creditors, enables a substantial portion of the chain to continue operating and is in the best interest of Hoop's suppliers, landlords, creditors and others."

The side-by-side closure of stores of two of the largest retailers in the U.S. indicates the extent of the tight financial crunch on American consumers who had to cut back on spending.

Jennifer Black of Jennifer Black and Associates told the USA Today, the store closure is merely the start of an expected protracted slump in the overstored retail industry.