Disney is closing at least 20% of Disney stores as it shifts focus to e-commerce

Pedestrians wearing protective masks wait to enter a Disney store in San Francisco, California on Wednesday, December 23, 2020.

David Paul Morris | Bloomberg | Getty Images

Disney announced on Wednesday that it will close 20% of its brick and mortar Disney store locations before the end of the year to focus more on its e-commerce business.

At least 60 of its North American locations will be closed, the company said, citing changing consumer behavior and a desire to link its online shopping experience with its Disney Parks apps and social media platforms. There are about 300 Disney stores worldwide.

“As consumer behavior has shifted towards online shopping, the global pandemic has changed consumer expectations of a retailer,” said Stephanie Young, president, consumer products, games and publishing.

The pandemic has sped the shift from physical stores to digital shopping by about five years, according to IBM’s US Retail Index. Industry-wide e-commerce sales rose 32.4% to $ 791.7 billion in 2020, and that number is only expected to grow.

Disney’s plan is to close a fifth of its Disney Store footprint first and then evaluate where other closings may have to take place. The company sees Europe in particular as a place where significant reductions can be made.

The company declined to provide financial details on how closings will affect its results, but noted that there will be an unknown number of layoffs coinciding with the store closings. Disney also declined to say which locations would be affected.

In particular, it will not affect Disney’s other shopping experiences, which include more than 600 Disney Parks stores, shop-in-shop locations in stores like Target, lifestyle and outlet locations, and third-party retailers around the world.

Disney’s partnership with Target, which has placed miniature Disney stores within the discounter, has grown from 25 to over 50 stores since 2019. The company declined to share plans for future locations.

The company will improve its current ShopDisney website and expand its product range with further collections for adult clothing, streetwear, premium household products and collectibles. Disney stores have typically been a curated selection of children’s clothing, toys, plush, and games. Online Disney will be able to target a wider demographic and expand its offering.

Disney is expected to provide more details on its website revamp and product releases in the future.

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