Outlets Disney-style

The Walt Disney Company has had nothing short of an eventful year. First, there was the divorce from movie giant, Miramax. Next: The Children's Place, Secaucus, N.J., a children's apparel store, acquired the Disney Stores in March.

As Disney adjusts to the Weinstein split and new ownership of 306 stores in North America, the Disney Store enters a new phase with six new, Disney Store outlets opening this year throughout North America including one in Canada.

The Children's Place expects to expand the Disney brand, not cheapen it, through discounted products at the new outlet stores. These stores are larger in size than the regular Disney stores at more than 7,000 sq. ft. The first of six stores opened this March at the Woodbury Commons Mall, Central Valley, N.Y., with a promotional giveaway of 303 Mickey Mouse ears and 1,350 balloons for the first customers, who purchased $30 or more during opening weekend.

The New York outlet is just the beginning of the Disney expansion in '05. This year, five additional outlets—in Arizona, California, Illinois, Tennessee, and one international location in Ontario, Canada—will mark a new phase, and more increased revenue, for the Disney brand, which has experienced slow sales in the regular mall stores. Sales for the Disney stores were at $63.1 million, less than half the sales of The Children's Place stores, $198.4 million, in the nine-week quarter ending April of this year.

Mario Ciampi, president of the Disney Stores, North America tells Playthings that the new outlets will offer consumers high quality Disney products at a fraction of the cost of the regular Disney mall stores.

“We have strong experience with the outlet market at The Children's Place, and it's certainly not what it used to be,” says Ciampi. “It's a primary challenge to distribute our goods, and it's a real, strong customer traffic. Some of our best stores in the chain, The Children's Place, are outlets.”

Ciampi says that the move to the outlet market does not mark a demise of the retail Disney Stores, which first opened in 1987 at the Glendale Galleria in California. “Maybe 10 or 15 percent will be outlets,” says Ciampi. “The rest will be the typical mall store, full-priced shopping centers.”

Disney Princess dolls, action figures, clothing and plush toys will all be available at the new outlets with a few items—videos for example—that will not be offered in the outlet, and others that will not be in the mall stores, and vice versa. Videos, and other media, will not be offered at the present time because the category cannot be marked down to prices expected by outlet shoppers. These items will remain in the Disney mall stores at the present time. “We're still contemplating the exact merchandise mix,” says Ciampi. “There may be a time when we produce different products for the outlets, but right now, it's going to be a very similar mix,” he tells Playthings.

Irregulars and “seconds,” which are normally sold in most outlet stores, will not be offered in the new Disney outlets. “It's not like the old days where people go there to buy seconds and overruns,” says Ciampi. “We think that the outlet customer today isn't looking for beat up or irregular, they're really just looking for value. You get shoppers that really want to buy items of higher quality, and it appears that the more recognized and the better the brand names perform, shoppers really gravitate towards these outlet stores.”

Ciampi says that the split with Miramax earlier this year hasn't affected the Disney Stores or the branded products sold in the outlets or mall shops.

Following the Miramax-split, Disney was left with the Miramax name, the Miramax and Dimension Films library of 550 films and the book publishing house. Disney also has the rights to co-finance more than 25 films with Harvey and Bob Weinstein, including sequels to films, Spy Kids and Scary Movie, under Dimension Films—the Weinsteins will keep the Dimension Films label, launched in the mid-1990s. “We sell Disney-branded products and some non-branded Disney products that are appropriate for children like Lizzie Maguire, Power Rangers,” says Ciampi. “We don't sell all Disney-related brands.”

The Disney Store will continue to expand online as well, and will be a similar shopping experience to the regular Disney Stores. We are building our web infrastructure now and we haven't decided exactly when we are going to launch,” says Ciampi. “The experience online will be mirrored by the experience in the full priced stores.”

The new outlets opening this year will be a new outlet experience for shoppers according the Ciampi. The additional five outlets—cities cannot be announced because leases have not been signed yet—will offer more options for Disney shoppers in addition to the mall and online shopping.

In the meantime, Disney promises a good mix of shopping experiences for all. “Its been our experience that the Children's Place shopper is a much more experienced shopper,” says Ciampi. “Compared to the mall stores, it [the outlets] will be a little more austere and conducive to the large crowds in the stores and the ease of shopping. Most of the outlets are a little bit out of the way, so you are going there to get a specific for a purpose: to really shop your heart out.”