Disney, JCPenney to Develop Apparel Lines Under Retail Licensing Agreement; Debut of ``Disney's It's a Small World After All'' Clothing Line at U.S. Retailer Beginning This Fall.

Business Editors

BURBANK, Calif.--(BUSINESS WIRE)--Feb. 14, 2001

Two newly created lines of Disney children's apparel will be developed, produced and offered by the J. C. Penney Company Inc. under a direct-to-retail license between the retailer and Disney Consumer Products, it was announced today by Andy Mooney, president of Disney Consumer Products Worldwide.

Set to debut in fall 2001, one of the new JCPenney lines will feature beloved Disney characters, including Winnie the Pooh, Mickey Mouse, Minnie Mouse and Buzz Lightyear. A second unique collection, "Disney's It's a Small World After All," will showcase children from different backgrounds and cultures around the world. This exclusive assortment is inspired by the art style, creativity and storytelling of the "It's a Small World" attraction at the Disneyland and Walt Disney World Resorts.

The two companies will work in concert to create children's sportswear and sleepwear. The lines will be available at JCPenney department stores in the United States, as well as through the JCPenney Catalog and JCPenney.com.

Under the direct-to-retail model, Disney Consumer Products licenses its characters and brands to select retailers globally, rather than to third-party manufacturers and distributors. Retailers will source and manufacture products directly, for sale exclusively through all channels of their retail outlets.

"Our agreement with JCPenney marks our first with a department store, and is an important development in the growth of our direct-to-retail licensing business," said Mooney.

"JCPenney is a leading retailer and a proven brand builder. The breadth of JCPenney's distribution coupled with the company's reputation will help us reach a great number of consumers with creative new apparel designs."

"This business relationship opens a new and exciting window of opportunity for JCPenney," said Vanessa Castagna, president and chief operating officer of JCPenney Stores, Catalog and Internet. "Disney is a premier brand with universal appeal. The ability to create exclusive designs is especially appealing and will add a new level of fun and energy to our children's assortment."

J. C. Penney Company, Inc. is one of America's largest department store, drugstore, catalog and e-commerce retailers employing more than 290,000 associates. The company operates approximately 1,100 JCPenney department stores in all 50 states, Puerto Rico and Mexico. JCPenney Catalog, including e-commerce, is the nation's largest catalog merchant of general merchandise.

JCPenney joins U.K. retailer Tesco, Sweden-based H&M and the Nordic retailer Lindex, as the first of Disney's direct-to-retail licensees. License agreements for those European retailers begin in mid-2001, and include all Disney properties (except theme parks, network television and ESPN properties) for children's wear. In addition, Disney has ongoing retail-license agreements with Belgium-based Donaldson and Italian retailer Pre-Natal.