As Disney plans to focus on e-commerce, the company said it would work on a better shopDisney website.
The Walt Disney Company (NYSE: DIS), popularly known as Disney, is planning to permanently close 20% of its stores as the company shifts focus to e-commerce. The company said the store shuttering would be done before the year ends.
Disney announced its plans to close 20% of its stores on the 3rd of March. With about 300 Disney stores worldwide, the company said it would close about 60 of its North American locations. According to Disney, consumer’s buying behavior has changed due to the unprecedented coronavirus pandemic. The president of consumer products, games, and publishing at Disney, Stephanie Young, said:
“While consumer behavior has shifted toward online shopping, the global pandemic has changed what consumers expect from a retailer.”
According to IBM’s US Retail Index data, the coronavirus pandemic has accelerated the transition from physical stores to online shopping by about five years. At the peak of the pandemic and when stores were forced to shut down due to the global health crisis, consumers had to resort to online shopping. In the e-commerce industry, sales advanced 32.4% to $791.7 billion in 2020.
At first, Disney would shut one-fifth of its Disney Store footprint, after which the company would evaluate the best locations to close other stores. Notably, Disney is considering closing most stores in Europe.
As stated in a CNBC report, Disney declined to comment on the specific location that would be affected by the closure. Disney’s park stores, shop-in-shop locations, and third-party retailers globally will not be affected by the closure. Other Disney’s shop-in-shop locations are in stores like retail company Target Corporation (NYSE: TGT).
Furthermore, Disney refused to note how the shuttering would financially affect the company. However, the company said there would be an undisclosed number of layoffs.
Disney to Revamp Website amid Closing Its Stores
As Disney plans to focus on e-commerce, the company said it would work on a better shopDisney website. The company further stated that its product assortment would now include more adult apparel collections, streetwear, premium home products, and collectibles. Basically, Online Disney plans to offer services to a wider demographic.
In the report, CNBC said Disney may share more details on its website revamp and addition of new products in the future.
Disney stock is currently at after-hours trading of $192.26, the same price as its previous close. DIS stock has grown more than 6% over the past year and increased over 6% since the beginning of January. In the last three months, the company has jumped 25.16% and has gained nearly 9% over the past month. Despite the recent gains, however, Disney stock has declined 2.66% in the last five days.
With the global change caused by COVID-29, Walt Disney CEO Bob Chapek recently said there is no “going back” to the old movie theatre distribution model.