Discovery Communications is getting out of the brick and mortar retail business, moving to partnerships and e-commerce to sell products related to its cable/online networks. All of the remaining 103 Discovery Channel Stores – both standalone and mall locations – will be shut down by the end of Q3. The company says that will eliminate approximately 1,000 full- and part-time employees, or about 25% of the global workforce of Discovery Communications.
"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. While retail is historically not the core competency of global media companies, there is strong consumer demand for Discovery's branded product lines. The company's e-commerce operations posted record growth and sales for 2006, and to realize the full value of our quality content, Discovery must also sell through large retailers who have more stores and provide more exposure to a greater number of consumers," said David Zaslav, President and CEO of Discovery Communications.
Going forward, Discovery will focus on ecommerce, with its own DiscoveryStore.com and partnerships with such outlets as Amazon.com and eBay. The company said its e-commerce operations posted record growth and sales for 2006 and are up 144% YTD over last year. It will also continue its catalog business as a core sales outlet.
Discovery will continue its licensing partnership with transportation retail specialist Hudson Group, which operates Discovery Channel Airport Stores in top airports across the United States and Canada. Discovery will continue the Animal Planet successful relationship with Toys "R" Us, which has generated great brand exposure, and the company said it will also develop long-term programs with key manufacturers to translate Discovery's content in a wide array of merchandising opportunities.