The Walt Disney Company announced on Wednesday that it plans to permanently shut down at least 60 Disney Stores located in North America over the course of 2021. The company reportedly plans to shift more heavily into online sales and limit the number of physical locations that currently act as its stores.
The pandemic has changed how many people shop, creating more of an incentive to buy items online and avoid stores to maintain social-distancing and quarantine guidelines. According to The Wall Street Journal, this has affected many retailers that thrive off of an in-person store environment, such as shopping malls, which “have suffered losses.” However, retailers that operate mostly over the internet have done well. The Wall Street Journal reports that corporations like “Amazon.com Inc. or Target Corp, which has scaled up its e-commerce business, have seen their fortunes soar as consumers became more dependent on online shopping.”
In a report on retail e-commerce estimates, the U.S. Department of Commerce stated that “Total e-commerce sales for 2020 were estimated at $791.7 billion,” which is up 32.4 % from 2019. Total retail sales in 2020 only went up 3.4 % from 2019. “E-commerce sales in 2020 accounted for 14.0 percent of total sales,” while the e-commerce sales of 2019 reportedly only made up 11% of total sales.
Disney has about 300 stores around the world, but the company did not say how many stores are owned in North America. The decision to close 20% of its total locations is a significant shift. CNBC reports, “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.”
Stephanie Young, president of consumer products, games, and publishing, said, “While consumer behavior has shifted toward online shopping, the global pandemic has changed what consumers expect from a retailer.”
Disney also said that it plans to make its ShopDisney website better and expand the types of products it sells in order to add “more adult apparel collections, streetwear, premium home products, and collectibles.” Since Disney Stores often catered towards a younger demographic, building a better online experience for consumers may help Disney reach a broader audience.
Disney has a wide range of other “shopping experiences,” however, such as its Disney Parks stores (of which there are over 600), and its “shop-in-shop locations in stores like Target, lifestyle and outlet locations, and third party retailers around the world…” These locations will reportedly not be affected by the closures.
Since 2019, the number of stores included in Disney’s Target collaboration, where miniature Disney Stores are placed inside the massive chain, has reportedly more than doubled.
According to a Disney spokesperson, each of the Disney Stores that will be closing down was affected by the Covid-19 pandemic and was forced to shut down during lockdowns, as reported by The Wall Street Journal. “With Disney’s theme parks encountering disruptions and closures during the pandemic, sales of its merchandise at those locations have also suffered.”
In November 2020, Disney reportedly also started up online stores in other countries, such as India, New Zealand, and Australia.
Disney did not announce which brick-and-mortar stores would be closing and is expected to provide more details about its website changes and product expansion at some point in the future.
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