Mickey Mouse’s digs at Scottsdale Fashion Square, Mesa’s Fiesta Mall and Paradise Valley Mall are scheduled for extreme makeovers.
That’s the plush Mickey, of course, and his pals Snow White, Tinkerbell, Nemo, the whole cast of "The Incredibles," the recently rereleased "Bambi" and the rest of the vast stable of Disney characters appearing on T-shirts, pajamas, lunchboxes, games, sippy cups and whatnots.
To add to the local excitement, one of the first Disney outlets — a new off-price concept — is targeted for Tempe’s Arizona Mills mall. It probably will open in October, just before the annual holiday spending season shifts into high gear, said Mario Ciampi, president of Disney Stores.
Eventually the company plans to start opening more mall stores, reversing the trend of the past couple of years that saw Disney’s retail operation pare down, dumping locations such as Mesa’s Superstition Springs Center store in an effort to improve the bottom line.
"Our effort will be to fix what we have, remodel the older stores and then begin to grow," Ciampi said.
The changed outlook comes from new ownership. The Children’s Place purchased the 313 Disney Stores and the right to run the chain — all the retail operations except shops at the theme parks and the World of Disney on Fifth Avenue in New York — from The Walt Disney Co. in November. The kids clothing retailer quickly developed a strategy for restoring the Disney-themed chain’s lost luster.
Ciampi, formerly senior vice president of store development for The Children’s Place, was tapped to pilot the turnaround. A new look for the stores, new sources for the products, better quality, lower prices and a merchandise lineup geared toward what Disney fans really want to buy are tops on the agenda, Ciampi said. The company committed $100 million to make it happen.
Some of the changes are already evident. Among the most obvious are the prices. Formerly $14.50-priced princess dolls sell for $9.50. Themed T-shirts that previously were priced at $10.50 can be had three for $22.
Disney typically marked the products high, and then staged sales, Ciampi said.
That’s an inefficient way to operate, he said. Switching to "everyday value pricing," similar to that of The Children’s Place, actually increases revenue and reduces expenses, Ciampi said.
In reporting February sales, The Children’s Place spokesman Seth Udasin said the new Disney pricing has already made an impact.
"At Disney Stores, in February, we increased our efforts to improve gross profit margins by reducing the level of promotions activity, and we met our net merchandise goals," he said.
Udasin also commented on the merchandise mix. Sales of "hard lines" — toys, souvenirs — were stronger in February than a year earlier, but "soft lines" — clothes, beach towels and the like — and "media" — DVDs, movies, books — were weaker.
Watch for a savvy retailer like The Children’s Place to make adjustments to reflect the figures, said Margaret Whitfield, retail analyst at Ryan Beck & Co.
"Because (The Walt) Disney (Co.) had already done all the ordering through the holiday season, there was nothing they could do until February," Whitfield said.
Disney Stores have had five consecutive years of doubledigit growth in toy sales, while most analysts estimate the toy business slipped in the past year. Toy store giant Toys "R" Us estimates the industry decline at 5 percent, Whitfield said.
Impressive gains in what could at best be described as a flat growth period prove Disney-themed toys have a distinct market, she said. Toys currently make up about 30 percent of the Disney Stores’ business. Look for that to increase to at least 35 percent to take advantage of the Disney draw, she said.
And Whitfield expects the media products — currently about 10 percent of the Disney Stores’ inventory — to slip to 5 percent.
Ciampi said plans to "remerchandise" the stores are already in the works, although the changeover won’t be complete until fall.
"Our product will be 100 percent exclusive and authentic Disney — a unique product you won’t find at K-B Toys, Toys ‘R’ Us or Wal-Mart," he said. "The Children’s Place will have total control over what is sold — the design, manufacture, source and distribution."
Among the new-andexclusive lines already in development are kids swimwear designs in sizes 2 to 12 featuring Disney characters such as Tinkerbell, the always-favorite princesses, Power Rangers, Kim Possible, Nemo, Buzz Lightyear, Raven and others.
Whitfield said kids’ clothing — especially little kids’ clothing — is a big growth opportunity for Disney Stores, while adult garb is less in demand.
Along with the new merchandise is a plan to remodel all the stores, Ciampi said. The new prototype will bring fun and entertainment back into the shops, he said.
The company is high on the Valley, so Valley stores will be high on the list for re-dos, which are slated to begin in the fall and extend through 2006.
"Phoenix is a young, affluent, growing market — a market we like," Ciampi said.
That’s also why the company pegged Arizona Mills for one of just a handful of outlet stores it plans to open this year. The first is slated to open in New York next month. The Tempe store is likely to open in October, he said.
Arizona Mills marketing director Denise Hart said Mills’ management is excited about the prospect of a Disney outlet. The mall already has a Children’s Place outlet store, Hart said.
"We’re a family-oriented shopping center. All of our children’s stores do well here, and toys is one of our top categories," she said.
At Phoenix-based Westcor, which houses The Children’s Place in all its malls and Disney Stores in several, the prospect of seeing the chain grow again is exciting, said Tracey Gotsis, senior vice president.
"What’s intriguing us most about Disney Stores and The Children’s Place collaboration, is that with K-B Toys closing (stores), it hasn’t been a deep market. Families are our No. 1 demographic focus. The fact that we have a relationship with The Children’s Place is positive, and to have them make a commitment to Disney Stores’ future is important," Gotsis said.
Gotsis hopes when Disney Stores starts expanding again they will move into other Westcor malls, such as Chandler Fashion Center, and commit to future ones, such as the planned 440-acre San Tan Village in Gilbert.
Soon, Disney Stores may be the only option for buying toys in malls, Whitfield said, as cash-strapped K-B Toys continues to founder.
Many U.S. malls, including Scottsdale Fashion Square, already lost K-B locations. More closings could be coming.
Meanwhile, nonmall toy retailer Toys "R" Us is on the market and potentially nearing a deal with a purchaser. Whitfield said the Toys "R" Us toy business should survive a sale in some form, but if a real estate investment group ends up the new owner, watch for locations that could be more valuable as something else to close.
Those toy chains say they have been hurt because shoppers are purchasing their toys at discounters such as Wal-Mart and Target.
Ciampi said with Disney Stores selling exclusives of most products and limitedtime exclusives for such items as movie releases, Disney fans won’t have the option of finding those goods at Wal-Mart or Target.
Gotsis said with new owners committing to make and sell items exclusively for Disney Stores, existing shops will regain brand equity — a boost for the malls.
"It will once again be a destination store," she said.
It’s a lofty tag for a chain that teetered on the verge of toppling — just another retail casualty.
The Children’s Place likely saved Disney Stores from the fate of AOL Time-Warner’s WB Studio Stores or the even shorter-lived Nickelodeon stores, said Faith Hope Consolo, chairwoman of the retail leasing division of Prudential Douglas Elliman. Scottsdale Fashion Square had one each of those now-dead entertainment-themed shops.
The problem, she said, is that companies whose core business is theme parks, movies or TV often think of stores as existing just to support those operations.
"Disney was more about promoting the characters and the movies," Consolo said. "But the whole toy business was changing, affected by electronics and new types of products."
Disney wasn’t paying attention, she said.