Disney (NYSE:DIS) announced on Tuesday that the company planned to close at least 30% of its brick-and-mortar retail stores in North America by the end of 2021. This amounts to an estimated 60 locations in all. Disney described the move as the beginning of its downsizing efforts with plans to assess operations at other locations, with the potential for more closures.
The company has roughly 300 Disney stores worldwide. Underperforming locations in Europe could be next on the chopping block. It currently has no plans to scale back the retail stores that support its theme parks and resorts or the store-in-a-store locations at Target (NYSE:TGT).
As a result of the pandemic, the ongoing adoption of e-commerce shifted into overdrive, fueled by lockdowns. Many of the physical Disney Store locations had their businesses interrupted as governments and companies scrambled to curb the spread of the coronavirus.
"While consumer behavior has shifted toward online shopping, the global pandemic has changed what consumers expect from a retailer," said Stephanie Young, president of Disney's consumer products, games and publishing.
In addition to closing many of its retail stores, Disney plans to revamp its shopDisney online store to improve the customer experience. This will include integrating its digital retail operations with the mobile apps used by consumers at its theme parks and social media platforms.
Other improvements will include a broader selection of merchandise designed to appeal to adults, including apparel, collectibles, streetwear, and premium home products. Disney Stores have historically been geared toward children, carrying a broad array of toys, games, apparel, and stuffed animals.