Disney to close 20% of Disney stores as it shifts its focus to e-commerce

Disney said Wednesday that it will close 20% of its physical Disney Store stores 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 changing consumer behaviors and a desire to link their online shopping experience to their Disney Parks apps and social media platforms. There are around 300 Disney stores around the world.

“While consumer behavior has shifted to online shopping, the global pandemic has changed what consumers expect from a retailer,” said Stephanie Young, president of consumer products, games and publishing.

The pandemic has accelerated the shift from physical stores to digital shopping in about five years, according to data from IBM’s US Retail Index. Ecommerce sales industry-wide increased 32.4% to $ 791.7 billion in 2020, and that number is only expected to grow.

Disney’s plan is to start by closing a fifth of its footprint in the Disney Store and then assessing where other closures may need to be made. The company looks to Europe, in particular, as a place to make significant cuts.

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

In particular, Disney’s other shopping experiences, which include more than 600 Disney Parks stores, in-store shopping locations at stores like Target, lifestyle and retail locations, and third-party retailers around the world are not will be affected.

Disney’s partnership with Target, which has placed miniature Disney stores within 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 improve its current ShopDisney website and increase its product assortment to include more collections of adult clothing, streetwear, premium home products and collectibles. Disney stores tended to be a curated selection of children’s clothing, toys, stuffed animals, and games. Online Disney will be able to serve a broader demographic and expand its offerings.

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