As many expected, Discovery announced Thurs it will close its 103 mall-based and standalone Discovery Channel Stores by the end of 3Q. About 1K full-time and part-time employees (approx 25% of Discovery’s global workforce) will be impacted. The stores haven’t exactly been a bright spot on Discovery’s balance sheet, losing $30mln per year despite pulling in $125mln-$130mln in annual revenue, an exec said. The programmer’s new strategy will focus on pushing products through large retailers, such as Toys "R" Us, and via e- commerce (Web and ITV commerce). DiscoveryStore.com and the company’s other e-commerce operations posted record growth in ’06 and are up 144% YTD over last year (Discovery doesn’t break out its e-commerce revenue). "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," Discovery pres/CEO David Zaslav said. "While retail is historically not the core competency of global media companies, there is strong consumer demand for Discovery’s branded product lines." The move is part of Zaslav’s overall restructuring effort. Discovery cut 200 jobs in Apr and eliminated several senior positions in Feb, including the post of Discovery Nets US pres held by Billy Campbell. Further restructuring is expected.

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