Disney Stores:
Where did the Magic Go?

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By scoopa
May 19, 2003

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The possible closing of Disney's retail store should serve as another warning to investors that the Disney Company's present senior management team has run out of steam. One only has to look back at management recent moves to see the company has squandered the value of the Disney brand in one failed venture after another.

1st, we have which, beside landing Disney in court for stealing the name from another dotcom company, suit was settled against Disney for millions out of court, has caused the company to take $1 billion in losses as the internet bubble burst.

2nd, we have ABC which, besides costing the company billions to purchase, has slid from being a constant 1st or 2nd in the TV ratings to a recent 4th place and the network has been and is still bleeding in excess of $500 million dollars per year in losses.

3rd, we have DCA [Disney's California Adventure], which after three years of operations, is still failing to bring in the projected crowds and was voted into last place in the recent Consumer Reports poll of its subscribers.

And now 4th, management has taken a part of the company, which until as recent a 1999, was showing "11 percent growth in same store increase in infants and children's apparel, and a 21 percent increase in plush toys. The 1999 Halloween season saw a 60 percent same store sales increase..." (Disney Company annual report 1999), and has somehow managed to turn this division around 180� and drive it into a steady stream of losses.

So, rather than saying "Good they should be closing all the Disney Stores", the shareholders in Disney should be saying "Let's throw these bums out" before they manage to close the rest of the company. This latest possible move by Disney is just another example of the total ineptitude of the present leadership of Disney and its inability to capitalize on the strength of the Disney brand.


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