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Disney Plans Store Overhaul to Boost Sales

Retail: Remodeling includes more room for product display and expansion of offerings at hundreds of outlets.


Walt Disney Co., hoping to pump life into its listless retail division, said Wednesday it plans a sweeping overhaul of about 350 of its Disney Stores in North America while closing at least 100 stores worldwide over the next few years.

The Burbank-based company made the announcement as it unveiled its first redesigned Disney Store, packed with stuffed animals, signature baby clothes, Mickey Mouse toasters and an array of other products aimed at turning browsers into buyers.

The new store at South Coast Plaza in Costa Mesa is a prototype for what could become a broad overhaul of the entertainment giant's themed stores, which have always attracted plenty of gawkers but in recent years generated disappointing sales.

Under the new concept, Disney has shelved space-taking displays of Dumbo, Goofy, Donald Duck and Alice in Wonderland to carve out more space for merchandise for sale. It has also installed computers so customers can buy products that aren't in the stores--and Disney theme park tickets.

"It was time for us to change," said Thomas Park, executive vice president of Disney Stores Worldwide.

The customers who shoved into the new store Wednesday were quick to notice the differences between the older, darker Disney Store next door, which closed as the new store opened, and the bright, new prototype featuring a wall of TV screens showing clips of Disney movies and promoting its products.

"I kind of liked the ambience of the other store," said Julie Pearce, a 32-year-old Garden Grove resident. "But they've definitely got more products in here."

Generally, analysts favored the concept, noting it could help improve sales in Disney's sluggish consumer products division, which is dominated by licensed products. To gain more control over its brand, Disney cut by half the number of companies that are licensing its products.

Disney has expanded some product categories at its new store, enlarging its selection of baby apparel and offering new household items, such as a $79 toaster that plays "It's a Small World" and makes toast with an imprint of Mickey Mouse. It also intends to begin using more Disney characters on its products to take the pressure off the Mickey Mouse and Winnie-the-Pooh characters that drive much of the store's sales.

To help spur sales during the critical holiday shopping season, the company for the first time will conduct a television advertising campaign pegged to the stores. The campaign will feed off of Disney's upcoming movie, "102 Dalmatians," while suggesting 102 reasons to shop in Disney stores.

The ambitious retooling effort comes as theme stores in general have taken their lumps. Some analysts say consumers simply may have grown weary of themed products.

Disney's stock closed Wednesday at $39.88, up 56 cents a share, on the New York Stock Exchange.

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