Disney said Wednesday it will close 20% of its Disney Store brick-and-mortar locations before the end of the year as part of a greater focus on its e-commerce business.
At least 60 of its North American locations will close, the company said, citing a change in consumer behavior and a desire to connect their online shopping experience to its Disney Parks apps and social media platforms. There are about 300 Disney Stores worldwide.
“While consumer behavior has shifted toward online shopping, the global pandemic has changed what consumers expect from a retailer,” said Stephanie Young, president of consumer products. practice, games and publishing.
The pandemic has accelerated the shift away from physical stores to digital purchasing in about five years, according to data from IBM’s U.S. Retail Index. E-commerce sales across the industry jumped 32.4% to $ 791.7 billion in 2020, and that figure alone is not expected to grow.
Disney’s plan is to start by closing one-fifth of the Disney Store footprint and then assess where another closure might occur. The company sees Europe, in particular, as a place to make big reductions.
Walkers with a protective mask are waiting to enter the Disney store in San Francisco, California, on Wednesday, December 23, 2020.
David Paul Morris | Bloomberg | Getty Images
The company declined to provide financial details on how closure will affect its results, but noted that there will be an undisclosed number of layoffs at the same time as the stores close. Disney also declined to say which areas would be affected.
In particular, this will not affect Disney’s other shopping experiences, which include more than 600 Disney Parks stores, in-store shopping locations such as Target, lifestyle and retail outlets, and -third-party sales worldwide.
Disney’s partnership with Target, which has placed small Disney Stores inside the discount retailer, has grown from 25 stores to more than 50 since 2019. The company declined to share plans for future locations.
The company says it will develop the existing ShopDisney website and expand its product range to include more adult clothing collections, streetwear, major home products and collectibles . Disney Stores tended to be a curable selection of children’s clothing, toys, plush and games. Disney Online will be able to cater to a wider demographic and expand what it offers.
Disney is expected to share more details about its website update and future product releases.
Shares of the company remained unchanged after the market closed on Wednesday. Since January the stock has risen 6% and is up more than 65% in the last 12 months.