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News > Companies
Discovery Zones out
June 30, 1999: 8:29 p.m. ET

Closes over 100 'Fun Centers' as Chuck E. Cheese goes for the save
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NEW YORK (CNNfn) - Anyone heading for over 100 of Discovery Zone's "Fun Centers" a few days ago discovered something they hadn't bargained for: the children's entertainment centers were closed.
     In a move that caught many parents by surprise, the Elmsford, N.Y.-based Discovery Zone Inc. (DVZN), which has been operating under Chapter 11 bankruptcy protection since April 20, abruptly closed 106 of its 200-plus Fun Centers over the weekend.
     Parents, many of whom did not find out about the closings until they arrived at the centers with carloads of children, were reportedly sent scrambling to find other locations for their childrens' parties.
     Calls to the centers provided no information about the sudden closures. However, on Wednesday, the company issued a statement explaining it chose to close the centers this past weekend in order to save on rent.
     "They were immediately scheduled for closing to allow for removal of owned and leased equipment and fixtures before the end of the month, the next date that rent was due on these leased properties," the statement said.
     The statement came two days after calls were made to the company about the closings. Neither Jeff Sasson, acting chief executive officer, nor the company's bankruptcy attorney were available to elaborate on the statement Wednesday.
     "It is unfortunate that we had to close so many Fun Centers with little or no notice," Sasson said in the statement, "but we were unable to act on the store closings or begin the process of rescheduling reserved activities until the auction process was over and we were assured Fun Center sales would be approved by the bankruptcy court.
     "The abrupt closings were necessary to prevent any further hardships already being put upon our vendors and creditors," Sasson said.
     The company said it is attempting to reschedule birthday parties and other events to Fun Centers that will remain open until planned sales transactions are completed and they are transferred to new owners.
    
Chuck E. Cheese to the rescue

     Discovery Zone is selling certain assets, including 13 Fun Centers to CEC Entertainment Inc. (CEC), owner of the Chuck E. Cheese restaurants.
     Dick Huston, CEC's executive vice president, said his company is rescheduling parties to available Chuck E. Cheese locations, and throwing in $25 free game tokens.
     Huston said in an interview on Monday that the Irving, Tex.-based company had to scramble over the weekend to help desperate parents find a place to hold their parties.
     "It's been just frantic," Huston said. "People called in and had birthday parties scheduled. We probably managed to book about a third, which isn't great. We think next weekend we could probably double that. It's such a last minute thing. We've been talking to some moms. Once we work it out with them, they understand it wasn't us who shot them down."
     Huston said that to the best of his knowledge, there are only about 25 to 30 Fun Centers operating.
     Discovery Zone said parents may call 954-316-5501 for information on rescheduling parties.
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