I just read something that kind of shocked me as a Disney (NYSE: DIS) shareholder. In a sense, I almost don't believe the news. It looks like Disney might be re-exposing itself to the retail business in North America.

Remember, it wasn't so long ago that the Mouse decided to exit retail because of difficulties in that part of its consumer-products business -- it had given up its Disney Store operations to Children's Place (Nasdaq: PLCE).

Now, however, Children's Place is having difficulties of its own, and it has decided to enter into negotiations to hand the Disney Stores back to its original owner. According to this article from yesterday, Disney could theoretically take back two-thirds of the current Disney Store portfolio. Children's Place, as one might expect, was up significantly on the news.

Without a doubt, I don't want to see Disney back in this retail business. I have too many memories in terms of challenges at the chain. There was a time when stores such as these were strong -- remember Time Warner's (NYSE: TWX) popular-but-now-just-a-memory retail brand? -- but those times seem to have passed for now, at least.

I think Disney should concentrate on higher-margin licensing operations and leave the game of sales-per-square foot to others. Of course, I do understand that Disney might be thinking that it is in its interest not to let the chain just disappear. That might be a bit of a black eye on the corporate face of the Mouse, but I just don't believe that salvaging the retail chain should be part of Disney's long-term strategic goals at the moment.

With the recession upon us, consumers' wallets are already distracted enough. Disney is doing well right now with its various business segments, but diverting any focus to even two-thirds of the Disney Store locations is two-thirds too many.

Disclosure: I own shares of Disney; positions can change at any time.

Should Disney salvage its retail chain? originally appeared on BloggingStocks on Fri, 21 Mar 2008 08:22:00 EST. Please see our terms for use of feeds.