Discovery closing stores, slashing 1,000 jobs
NEW YORK (Hollywood Reporter) - Discovery Communications announced on Thursday that it will close its 103 stand-alone and mall-based retail stores, cutting 1,000 jobs, or 25 percent of the company's global workforce, in the process.
The move is the latest cost-cutting measure from new president and CEO David Zaslav, who eliminated another 200 jobs at Discovery Communications in April and replaced a handful of senior executives in February, a month after he joined the company.
Zaslav has been leading a company-wide strategic review aimed at eliminating underperforming divisions of the company while shoring up those that have the most growth potential. The Discovery Stores lose approximately $30 million a year, according to a company executive.
Discovery said that to sell its products, it will continue to develop partnerships with large retailers and work on strengthening its successful e-commerce activities. The company said its e-commerce operations posted record sales and growth in 2006 and are up 144 percent year-to-date. It said DiscoveryStore.com has more than 12 million unique visitors annually and also reaches consumers through partnerships with Amazon.com and eBay.
"By eliminating our owned-and-operated brick-and-mortar storefronts, which are cost-intensive and complicated businesses, Discovery can focus its efforts on high growth e-commerce and licensing operations," Zaslav said.
Discovery said the closure of its stores will be completed by the end of the third quarter. It will retain Gordon Brothers Group, an advisory, restructuring and investment firm, to facilitate the liquidation.