NEW YORK (Reuters) - Children’s Place Retail Stores Inc. (PLCE.O) said on Friday that it settled a dispute with a Walt Disney Co. (DIS.N) unit regarding its license to operate the Disney Store retail chain in North America.
As part of the deal, Children’s Place said it is developing a new prototype for the Disney stores and will obtain Disney’s approval of the prototype this month.
The retailer said it will remodel 234 existing stores into the new store prototype by January 31, 2012. It will also open at least 18 new Disney stores using the new store prototype by early 2009.
In addition, Children’s Place will complete a “maintenance refresh” program in about 165 Disney stores, including the flagship store on Michigan Avenue in Chicago, no later than June 30, 2008.
In the dispute, Disney had alleged that Children’s Place committed 120 “uncured material breaches” of its license agreement to operate the stores, meaning Disney could have terminated the agreement. The alleged breaches mainly related to store remodeling and maintenance.
Children’s Place said its board has approved spending $175 million between now and January 31, 2012 for the store maintenance and renovation program.
The companies also agreed to reduce the restrictions on Disney to grant direct merchandising licenses to other specialty retail store chains.
Children’s Place did not return phone calls seeking comment.