April 26, 2021, 11:35am
Multiple sources have informed Retail Insider that US-based mass media and entertainment conglomerate Disney will be shutting almost all of its standalone retail stores, including all 18 locations in Canada. Two Canadian locations already shuttered last month. The move comes as Disney re-evaluates its operations amid a challenging time for retail and landlords in North America as the pandemic increasingly shifts consumer shopping patterns to online channels.
Landlords in Canada with properties housing Disney stores are said to have been working with the company on the exit strategy for the past several weeks. Sources said that Disney is paying out monies owed to landlords on the remaining duration for its Canadian leases so as to bypass any potential litigation. The remaining duration of leases for the Disney stores in Canada vary from one year to more than five. Store staff have not yet been notified officially of the Disney store closures according to sources Retail Insider spoke to over the weekend, which means that this article brings with it unfortunate news requiring action. Landlords said that they were not permitted to comment on the record for this story.
Sources tell Retail Insider that the Canadian Disney stores will all shutter by the end of the summer, with one source noting that a date of August 1st had been set for at least one store location in Ontario. Discussions with landlords are said to be ongoing according to another source noting that the landlord is hoping to have one of the storefronts leased to a new tenant by July.
One source noted that in the United States, Disney is expected to keep a handful of stores open including a flagship location on Times Square in Manhattan. Over the weekend word began getting out on several US stores that will shutter, and we’re told that there will be many more. Our sources based in Canada were otherwise unable to confirm other details pertaining to global Disney store location closures.
Most of the Disney stores in Canada are in the 4,000-to-5,000-square-foot range, with one in Winnipeg being under 3,000 square feet and one at West Edmonton Mall spanning more than 5,600 square feet. Landlords will look to fill these spaces at a challenging time when many brands are seeking smaller retail spaces. At the same time, some of the Disney stores are in exceptional locations in some of the country’s top malls, and will be leased quickly. The current Yorkdale Disney store was already expected to be demolished for new retail space according to a building application. The new space would be geared towards luxury brands, being across from recently opened Louis Vuitton, Golden Goose and Thom Brown stores.
Disney’s Canadian stores are located in Ontario, British Columbia, Alberta, and Manitoba.
Eight of Disney’s stores in Canada are located in Ontario. That includes stores in the Toronto area (at CF Toronto Eaton Centre, Yorkdale Shopping Centre, Scarborough Town Centre, Vaughan Mils, Upper Canada Mall), Hamilton (CF Lime Ridge), Ottawa (CF Rideau Centre), and London (CF Masonville Place). A ninth Ontario location at Square One in Mississauga shut last month.
In Alberta, Disney currently operates four stores, two of which are located in Edmonton at West Edmonton Mall and Kingsway Mall as well as two stores in Calgary at CF Market Mall and Southcentre. A location at CrossIron Mills near Calgary shut last month. In British Columbia, Disney’s three storefronts include CF Pacific Centre in Vancouver, Metropolis at Metrotown in Burnaby and Guildford Town Centre in Surrey. Disney also operates its smallest Canadian location at CF Polo Park in Winnipeg.
Landlord Cadillac Fairview is left most exposed to the closures with 11 of the 18 Disney stores being housed in its Canadian shopping centre properties.
Disney never launched an e-commerce presence in Canada despite promises to do so, nor did it secure warehouse space for product fulfillment in terms of ship-to-store or otherwise. If consumers ordered online from the company’s global website, taxes and duties would be charged. One source noted that several of the Canadian Disney store units, including the CF Toronto Eaton Centre and West Edmonton Mall locations, were among the company’s top-selling stores.
On March 3, Disney announced that it was planning on focusing on its commerce business while at the same time reducing its brick-and-mortar footprint. A total of 60 North American locations were announced to close including the Square One and CrossIron Mills locations in Canada.
“Over the next year Disney will focus on providing a more seamless, personalized and franchise-focused ecommerce experience through its shopDisney platform which will be complemented by greater integration with Disney Parks apps and social media platforms,” Disney said in a statement in March. “This will be coupled with an assortment of new and elevated merchandise from the Company’s full range of brands, including adult apparel collections and artist collaborations, trend-forward streetwear, premium home products and collectibles.”
“While consumer behaviour has shifted toward online shopping, the global pandemic has changed what consumers expect from a retailer,” said Stephanie Young, President, Consumer Products Games and Publishing in a statement last month. “Over the past few years, we’ve been focused on meeting consumers where they are already spending their time, such as the expansion of Disney store shop-in-shops around the world. We now plan to create a more flexible, interconnected e-commerce experience that gives consumers easy access to unique, high-quality products across all our franchises.”
Disney said last month that guests will continue to have access to Disney shopping experiences in over 600 Disney Parks stores, shop-in-shops, lifestyle and outlet locations, as well as third party retailers around the world.
The Walt Disney Company reacquired the Disney Store business from Children’s Place Retail Stores Inc. in 2008, with 231 locations being purchased in Canada and the United States. Operating under the Disney Consumer Products division of the company until 2018, the stores were merged under a new division called Parks, Experiences and Consumer Products, which was previously under the leadership of Bob Chapek. Mr. Chapek was named the Chief Executive Officer of The Walt Disney Company in February 2020 and subsequently named Josh D’Amaro as his successor in the Chairman of Disney Parks, Experiences and Products. The Vice-President of Stores for North America is Jonathan Storey, who assumed his role in 2012 after previously leading the marketing for Disney Store Europe’s e-commerce and brick/mortar retail across 120 stores in the UK, France, Spain, Italy, and Portugal.