Exhibit 99.2
FOR IMMEDIATE RELEASE
For: Discovery Zone, Inc.
Contact: Robert Mead 305/627-2643
212/484-6701
DISCOVERY ZONE SEEKS TO REORGANIZE UNDER CHAPTER 11
---------------------
Company Will Close Unprofitable Stores
to Focus on Profitable Core of Operations
--------------------
Donna Moore Named CEO
FT. LAUDERDALE, FL. MARCH 25, 1996 -- Discovery Zone, Inc. announced today
that it has filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy
Code in the U.S. Bankruptcy Court for the District of Delaware. The Company said
that it elected to seek court protection in order to facilitate the
implementation of its operational turnaround and a financial restructuring.
Discovery Zone said that it will operate in the normal course of business
during the reorganization proceeding and that it has received a commitment for
$15 million in debtor-in-possession ("DIP") financing.
"We believe reorganizing under Chapter 11 is in the best interests of the
Company," said Donna Moore, Chief Executive Officer of Discovery Zone. "A
successful Chapter 11 reorganization will address the problems caused by the
Company's rapid expansion and put Discovery Zone on stronger financial footing."
Moore continued: "Discovery Zone is a viable concept, and we have an
opportunity to revitalize our operations with new marketing programs and
entertainment concepts that will improve the Discovery Zone experience for kids
and their parents. "
(more)
Page 15 of 12
<PAGE>
Discovery Zone said that it would move immediately to close unprofitable
store locations in order to improve its operating cost structure and allow the
Company to focus on core markets and locations. Discovery Zone said that it
would also continue to seek to reduce operating costs in remaining locations,
primarily through the renegotiation of unfavorable leases to reduce occupancy
costs.
Separately, Discovery Zone announced that Donna Moore has been named
President and Chief Executive Officer and a director of the Company.
Moore had served as President and Chief Operating Officer of Discovery Zone
since joining the Company in July 1995. Moore, a 35-year veteran of consumer
retailing, has held various management positions in retailing with major
sumer-oriented companies, including President of the North American division
of Laura Ashley, Inc., where she successfully oversaw a major reorganization.
From 1987 to 1992, Moore was Senior Vice President -Stores for The Walt Disney
Co. and spearheaded the dramatic growth of The Disney Stores from a 2-store test
concept to an international entertainment retailer with over 150 locations.
Before joining The Walt Disney Co., Moore was Senior Vice President - Stores of
Williams-Sonoma, where she oversaw the growth of that company from 17 stores to
more than 80 locations. Prior to that, Moore was Vice President of Retailing at
Marriott and developed that company's retail concept from 14 in-hotel gift shops
to 150 resort and specialty shops. Moore was most recently with Motherhood
Maternity, where she held the positions of President and Chief Executive Officer
since 1993.
Additionally, Discovery Zone announced that Sumner Redstone, Chairman and
CEO of Viacom Inc., and Philippe Daumann, Deputy Chairman and Executive Vice
President of Viacom Inc. have resigned their positions as directors of Discovery
Zone. Discovery Zone said that Adam Phillips, Senior Vice President and General
Counsel of Blockbuster Entertainment Group was appointed a director of the
Company. J. Brian McGrath and John L. Mouthing continue to serve as directors of
Discovery Zone.
Viacom has a substantial interest in Discovery Zone through its acquisition
in 1994 of Blockbuster Entertainment Group.
Discovery Zone is the leading operator of children's indoor entertainment
and fitness facilities.
###
Page 16 of 16
