The Children’s Place is one step closer to buying the once proud and vibrant chain of Disney Stores. The Disney Stores used to be known for providing a little bit of the Disney Magic via a cadre of highly trained employees (er Cast Members), a cache of unique Disney merchandise, and access to collectibe art and merchandise without having to visit one of the theme parks. Paul Pressler, who failed so miserably as President of Disneyland, led the charge of the Disney stores from 75 outlets to over 600. When he left to take the Disneyland position The Disney Stores seemed destined to be a strong part of The Walt Disney Company for the long term future.
It’s unclear what has happened since then. But here’s my take. A combination of three factors major factors have walloped the Disney Store chain. First was the requirement for each business unit (sometimes down to the individual store level) to do 20% growth a year. Eisner made this infamous promise to his stock holders in the late 90s when his job was at risk. He delivered. But it was only through serious cut backs in labor, development, and quality that the 20% growth was achieved. They hoped the customer wouldn’t notice. As it turns out the customer did notice and spending has declined.
A second factor was product mix. This may be related to the demand for 20% growth, or it might have been a result of faulty internal studies, but the product mix shifted from carrying a variety of products for adults, children (boys and girls), and collectors. From circa 1998 the product mix really began to shift to focus on the young girl. A strong product line to attract young boys was never found. The adult merchandise dwindled until it could be summed up in t-shirts and sweatshirts. The collectibles market vanished. Everything from watches to figurines and cells were replaced by Pins. The unique Disney Gallery stores were all closed. Last October we were promised a return of a diverse product line. Instead we got the start of a closing trend. Stores started disappearing from the scene left and right. Some communities lost contact all together with the Disney Company
The third factor was market saturation. 600 Stores were probably about 100-130 too many. Some of the magic disappated when you could find a Disney Store at every mall. Also, at somepoint the Consumer Product Division started to license Disney Merchandise in larger volume to retailers other than the traditional outlets. First Sears started carrying the same merchandise you could get at The Disney Store, but cheaper. Then Target and Walmart also got similar stock. Now you could get your Disney Fix at a myriad of stores other than the relatively expensive Disney Stores. This was probably a business decision pure and simple. The company could make much more money by just licensing and approving product than running the whole line from creation to delivery to retail sales.
All these factors, and a few smaller ones, have combined to do a KO on the Disney Store system. Now, Disney Consumers are some of the loudest consumers. We know what we want and we want it now. So it wasn’t as if The Disney Store management wasn’t getting feedback along the way from its customers, its employees, and what not. It just chose to ignore that feedback and stick with a business plan that turns out to have been illconsidered.
So, am I happy that The Children’s Place will be taking over the Disney Stores? No I’m not. I’d rather see a contraction down to 300 or so stores with a diverse product selection. I’d rather see Target, Walmart, and Sears lose their licensing agreements. Would this result in an increase in the bottom line for The Disney Company? Probably not. But it would result in a the return of a gem of a division to its former glory and the spreading of some of the famous Disney Magic back out into the world.