Nature Co. stores are sold Discovery Channel buys 117-unit chain for $40 million

April 30, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

The owners of the Discovery Channel yesterday made a big break into the retailing business, buying the 117 stores of the Nature Co. in a plan to promote the cable channel through the stores and promote the stores on television.

Discovery Communications Inc. of Bethesda agreed to spend $40 million to buy the retail chain from CML Group Inc. of Acton, Mass. CML sold the Nature Co. to concentrate on its more profitable NordicTrack exercise equipment and its Smith & Hawken gardening supply catalog.

Jim Boyle, a spokesman for Discovery, said the Nature Co. stores had revenue of $131 million for the fiscal year that ended in July. In a sign that the chain was slumping, however, CML disclosed that sales at stores open more than a year dropped 7.5 percent that year. Privately held Discovery, which also owns the Learning Channel, had 1995 revenue of $446 million but does not disclose its profits, he said.

CML does not report specific profit and loss results for the Nature Co. stores, but said in federal securities filings that the unit including the stores posted an operating loss of $13.2 million last fiscal year on $208.5 million in sales.

Mr. Boyle said the deal offers cross-promotional opportunities because the Nature Co.'s products, like programming on the Discovery Channel, explore nature, science and education. The stores sell fossils, nature-themed gifts, books, and educational games. The Nature Co.'s two Baltimore-area stores are at Harborplace and Towson Town Center.

"When you walk into a Nature Co. store, it's the physical embodiment of the Discovery Channel," he said. "It gives us a critical mass to cross-promote."

Discovery has been building that critical mass since last April, when it made a deal to put kiosks in Nature Co. stores to sell merchandise such as CD-ROMs and videos based on Discovery Channel programming. The division is the second that CML has sold this month. It sold its 116-store Britches of Georgetowne Inc. clothing chain for $13.4 million. The latest deal is expected to close next month. Yesterday, CML said it will take a charge against earnings of $15 million to $17 million, a sign that the price Discovery agreed to pay is less than CML had assumed the Nature Co. chain was worth.

Pub Date: 4/30/96

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