Disney will close 20% of Disney stores by shifting focus to e-commerce

Disney said on Wednesday that it will close 20% of its physical stores in the Disney Store before the end of the year, as part of a greater focus on its e-commerce business.

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

“While consumer behavior has shifted towards 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 accelerated the shift from physical stores to digital purchases in about five years, according to data from IBM’s US Retail Index. E-commerce sales across the sector jumped 32.4%, to $ 791.7 billion in 2020, and that number is only expected to grow.

Disney’s plan is to start by closing one-fifth of its Disney Store footprint and then assessing where further closings may be needed. The company is looking to Europe, in particular, as a place to make significant reductions.

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 closings of stores. Disney also declined to say which locations would be affected.

Notably, Disney’s other shopping experiences, which include more than 600 Disney Parks stores, shopping locations at stores like Target, lifestyle locations and outlets and third-party retailers around the world, will not 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 has refused to share plans for future locations.

The company says it will improve its current ShopDisney website and increase its product range to include more collections of adult clothing, streetwear, premium household products and collectibles. Disney stores used to be a curated selection of clothing, toys, soft toys and children’s games. Disney online will be able to serve a broader demographic and expand its offerings.

Disney is expected to release more details about the redesign of its website and product launches in the future.