Discovery to close its retail stores

Move comes as Zaslav forced to cut costs

By JOHN DEMPSEY

Discovery Communications, tired of losing $30 million a year on its chain of retail stores, will shut down all 103 of them by the third quarter.

These closings will affect about 1,000 Discovery Channel Stores employees, which represents 25% of the company's total workforce.

Move comes as Dave Zaslav, who joined Discovery as CEO in January, was given a mandate to cut costs. The heads of Discovery's TLC and Animal Planet resigned soon after, and last month 200 employees ankled the company.

Although its own retail stores are going away, Discovery will continue its partnership with the 550 Toys "R" Us stores for separate displays of merchandise derived from Animal Planet.

A spokeswoman said Discovery will look for more partnerships like that with Toys "R" Us, adding that the Hudson Group will continue to run the Discovery Channel stores located at seven airports in the U.S. and Canada.

Zaslav plans to beef up the Discovery Store Web site, which, through e-commerce, sells online all of the items in brick-and-mortar stores, ranging from DVDs and books to toys and telescopes. Discovery said its e-commerce operations grew by 144% during the year to date, a record.

Discovery will give more attention to T-commerce, the process that taps into the psychology of impulse buying. During the commercial break, T-commerce supplies an on-screen 800 number that gives TV viewers the chance to purchase, for example, a DVD of the "Planet Earth" series while they're watching an episode live.