Disney shuttering at least 20% of Disney Stores as it shifts focus to e-commerce

Disney said Wednesday that it will close 20% of its brick-and-mortar Disney Store locations before the end of the year as part of a bigger 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 its 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, games and publishing.

The pandemic has accelerated the shift away from physical stores to digital shopping by about five years, according to data from IBM’s U.S. Retail Index.

Industry-wide e-commerce sales jumped 32.4% to $791.7 billion in 2020, and that figure is only expected to grow.

Disney’s plan is to start by shuttering one-fifth of its Disney Store footprint and then evaluate where other closures may need to take place. The company is looking at Europe, in particular, as a place to make significant reductions.

The company declined to provide financial details about how closures will impact its results, but noted that there will be an undisclosed number of layoffs that coincide with the stores closing. Disney also declined to say which locations would be affected.

Notably, 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 will not be impacted.

Disney’s partnership with Target, which has placed miniature 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 improve its current ShopDisney website and increase its product assortment to include more adult apparel collections, streetwear, premium home products and collectibles.

Disney Stores tended to be a curated selection of children’s apparel, toys, plush and games. Online Disney will be able to cater to a wider demographic and expand its offerings.

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

Shares of the company remained unchanged after the market closed Wednesday. Since January the stock has risen 6% and is up more than 65% in the last 12 months.