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Viacom nixes Nick stores

Pickles, Finsters and the rest of the Rugrats posse will soon have to find a new home at retail-at least all private label merchandise that incorporates the characters' likenesses will. The same goes for any Nick items the kids cabler produces...
February 1, 1999

Pickles, Finsters and the rest of the Rugrats posse will soon have to find a new home at retail-at least all private label merchandise that incorporates the characters’ likenesses will. The same goes for any Nick items the kids cabler produces under its own brand.

The future of the product has been up in the air since December, when parent company Viacom announced plans to shutter all 16 of its Nickelodeon theme stores. Roughly 75% of the stores’ product offering was comprised of private-label Nick merchandise, says Susan Duffy, VP of corporate communications at Viacom. However, plans to find alternative distribution for the products once the closures have been completed in June have yet to be finalized.

Even though the Nick stores were making a profit, says Duffy, Viacom decided to close the chain, as well as its Viacom Entertainment Store in Chicago, in order to focus more on its licensing business. Viacom’s next step in the purge of retail holdings will be to sell its ownership of Blockbuster Video. Duffy says the company will likely sell 10% to 20% of the video chain through an IPO to be tendered sometime in the first quarter, and will unload the remaining 80% to 90% of the company by the end of the summer.

While Viacom analyst Tom Adams, of Adams Media Research, acknowledges the company’s goal to get out of retailing altogether, he believes the decision to nix the Nick stores was, in part, based on its inability to compete with the Warner Bros. and Disney studio stores.

‘It’s a scale issue,’ says Adams. ‘Whereas Viacom has been able, under Nickelodeon, to create a few characters that lend themselves to merchandising, they don’t have anything like the number of characters that Disney and Warner Bros. do. Also, most of Nick’s properties were TV-based. It’s much more difficult to generate the same buzz at retail for a TV series than it is for a blockbuster movie.’

Ironically, the decision came down just as the film side of Nick opportunities took off.

Viacom opened its first Nickelodeon store in the Mall of America (Minneapolis, Minnesota) in December 1997.

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