Two years ago, Disney rocked the retail industry with the unexpected announcement that it would close nearly all of its iconic Disney outlets to focus on online sales. There is one big exception.
Disney pioneered the concept of retail entertainment with the launch of its first store at Glendale Galleria in 1987. Its outlets revolutionized retail, housing small movie screens with old cartoon betting clips, while catchy Disney songs played on hidden speakers. shelves themed from movie sets and there were occasional appearances by cute Disney characters.
This put consumers in a state of heightened excitement and Disney took advantage of this captive by promoting them park tickets there. This gave outlets a key role in Disney’s business style and they were a resounding success. So much so that, according to Disney documents, in 2003, its retail stores had more visitors than all of its parks and resorts combined. Disney stores have been deployed worldwide and, as the graph below shows, at their peak in 2000, there were 741 stores worldwide.
Online grocery shopping cast a dark spell on the company, however, retail outlets continued until the Covid-19 outbreak. Most markets used the pandemic to lessen their reliance on bricks and mortars, however, smarter investors saw an opportunity to expand as costs came down. far from its summit.
In December 2020, less than 3 months before Disney announced its switch to e-commerce, it signed a deal to launch Disney Stores in an entirely new market. Instead of raising the curtain on the deal when it changed Disney’s retail strategy, the local operator of the outlets to continue with them. It was from strength to strength.
Surprisingly, one of the few regions in which Disney had not introduced its outlets also has one of the highest concentrations of high net worth consumers with a high point of affinity with the logo. The region is the Middle East, and has traditionally been through Disney. Instead, the media giant has favored other emerging markets such as Russia, where it opened the first Disney store in 2017, and China, home to a huge Disney theme park in Shanghai.
Disney flagship store in Shanghai (Photo via Zhang Peng/LightRocket Getty Images)
Disney didn’t have a satisfied end in either market, having to pull out of Russia in the wake of the Ukraine War, while its lead executive, Bob Iger, admitted to CNBC in 2021 that some of his optimism about China had “eroded” in the soft of his tension with the United States.
Given that Disney has invested heavily in China and Russia, despite both countries’ troubled track records, it turns out to be an astonishing missed opportunity not to have opened a single store in the Middle East, home to retail wonders like Dubai and Abu. This opportunity was not only lost through Disney’s parks, reporting and products division, but also through its media division. The U. S. Unidos. La Wait only has increased demand and the platform has been a huge fortune in the Middle East. Other brands have been much quicker to grab it.
The UAE hosts more US channels. It is more than perhaps anywhere else in the world outdoors in the United States. They are found in all matters of value and not only in retail, but also in food and beverages. Starting with national chains rarely found in other countries, the UAE has Applebee’s, Black Tap, Blaze Pizza, Buffalo Wild Wings, California Pizza Kitchen, Chuck E. Cheese, Dickey’s Barbecue Pit, IHOP, and even uncovered casual restaurants in Orlando. Tony Roma’s chain, formerly owned by Clint Murchison Jr. . , discoverer of the Dallas Cowboys.
Then there are the regional American chains that can be discovered throughout the Middle East, such as Kelly’s Cajun Grill, the famous place to eat fried fish Dave’s Midwestern and Caribou Coffee, a Minnesota coffee shop. It’s even more surreal at the higher end of the spectrum, as Dubai is home to a few places to eat that only have a handful of places in the US. U. S. Sarabeth’s luxury restaurant has five outlets in Manhattan and one in Dubai. You can also eat popcorn with liquid nitrogen at a Denver branch of Inventing Room and Jamaican food at Miss Lily’s, which only has one place to eat American in New York’s East Village.
Even fast food restaurants are the same old suspects, as it’s not unusual to see Hardee’s. Charleys Philly Steaks, Church’s Texas Chicken, Cold Stone Creamery and Popeyes throughout the Middle East. It’s the same in retail with chains like Bath.
Hardee’s is one of many American brands in Dubai (Photo credit: Jeff Greenberg/Universal Images GroupArray. [ ] Getty Images)
Surprisingly, although many of those chains are not considered high-end in the US, they are not considered high-end. In the U. S. , they are treated with respect in the Middle East and are sometimes within walking distance of ultra-high-end retail stores like Tiffany, Rolex, and Omega. From the appearance of the sign above the door, to the wallpaper, decorations, and accessories inside, American chains are almost glossy charcoal copies of their American counterparts.
The background music is the same, the dishes in the restaurants look the same, smell the same and taste the same as the originals. The only exceptions are the lack of red meat and alcohol, both of which are banned in the Middle East. As we have reported, restaurants and retail stores are thriving in the area, as malls have only been closed for a short time due to the difficult technique that local governments have adopted in the face of the pandemic. This has made the region less reliant on buying groceries online and has kept many of those brands in business, the loot not fully returning to the U. S. U. S.
These chains are franchises managed through local operators to make expats feel at home. This design also maintains consistency, as it means outlets can continue to market even if the franchisor goes bankrupt, as happened with several UK logos in the UAE. A whopping 90% of the country’s citizens are foreigners, which is why there are so many foreign logo franchises. One operator is leading the way in this area.
Kuwait-based Alshaya Group operates 2800 retail stores and owns franchises for many major U. S. brands. He added American Eagle Outfitters, Pottery Barn, P. F. Chang’s, Starbucks, The Cheesecake Factory and Victoria’s Secret. In December 2020, it added Disney to its roster when it announced a new five-year collaboration to implement Disney’s store-in-store concepts at Alshaya-operated retail outlets and online in the Middle East. It took more than a magic wand for this.
Disney’s qualified director of customer products for the Middle East, Sonal Patel, led conversations with Alshaya that began in 2018 and continued with the pandemic. “It was hard,” Patel said in an interview from his home office. “This was done from where I’m sitting now. We controlled signing one of the biggest contracts we’ve had in the region from home. “
Patel began operating in the retail sector in 1995 with the British Dorothy Perkins logo and, after six years, switched to selling with BHS branch. He then held a position at the same box at Disney Stores’ European headquarters in London, where he planned ranges. , controlled the shares and increased revenue. Patel then moved to Dubai to paint for The Landmark Group, one of the largest retail organizations in the region, where he controlled 3 of its logos. In 2014, Disney called back and jumped at the chance.
“There is an opportunity to lead the hard-line licensing business,” Patel said. “It’s very different [from retail]. The hard paintings were worth it, and more.
In July 2021, Alshaya opened the first Disney Store retail stores in the Middle East in Kuwait, Abu Dhabi and Dubai, where they are mainly located in branches of the former British branch Debenhams and the Mothercare childcare store.
The first six outlets had a bright new taste and sold toys, clothes, costumes and more. They are known in retail as concessions: committed spaces within a mono-brand store that are used through unrelated but complementary brands. it has themed sections around its most prominent franchises, adding Pixar, Marvel and Star Wars.
“We all grew up with Disney and we all have a favorite character. We are thrilled that Alshaya Group has collaborated with The Walt Disney Company Middle East to bring the magic of Disney, not only to a new generation, but to a lifetime. “fans,” said Alshaya CEO John Hadden.
A retail veteran with more than 20 years of experience, Hadden began his career as Director of Store Development for Starbucks in Europe, the Middle East and Africa. He then became Senior Vice President of Commercial Real Estate at Alshaya and rose through the ranks to become the most sensible position in June 2020. Together with Disney’s PR team in Dubai, he made word spread temporarily in the new outlets and had a magical touch.
In just 4 weeks after opening the first store in stores, Alshaya had introduced 26 more in the Middle East and, according to its website, the total now stands at an impressive 76, adding 25 in Saudi Arabia, 24 in the United Arab Emirates, 11 in Qatar and 16 in Kuwait. Perhaps the most disturbing progression, however, came in November last year when Disney’s first independent store in the Middle East opened in Kuwait, just as Disney was ending its outlets in other parts of the world.
The Avenues shopping mall in Kuwait is one of the largest grocery shopping malls in the world (Photo via YASSERArray. [ ] AL-ZAYYAT/AFP Getty Images)
Kuwait’s 800-square-meter store is internally located on The Avenues, which, with 1100 retail stores, is one of the largest grocery shopping malls in the world. front and features scenes from old cartoons. Inside, sketches of Mickey and Minnie line the walls, a huge banner shows the fairytale castle that sits in the middle of Disneyland in California, and a silver statue of Dumbo hangs from the rafters. It updates Disney Retail Stores and obviously served the purpose as 1,000 shoppers showed up on opening day alone.
“We couldn’t be more excited about the opening of the first stand-alone Disney store in the area,” Hadden said. provides an exclusive retail experience for kids and families that only Disney can deliver. “
Summing up the importance of openness, Patel said that “our outlets make up our entire logo and help consumers interact with products and staff. “we can provide them with the Disney magic that makes sense for this market. “He also praised the efforts of his boss and Disney’s local, regional and global groups that supported the launch. “It’s new to everyone, so we were all charting our ways, however, we learned a lot as a team. “
No effort has been spared as the store offers Disney-branded home decorations and even offers exclusive Middle Eastern lines. It is from other regions.
The latest financial statements for Disney Store in the UK show that in the year to 2 October 2021, cash fell 4. 4% to $125. 5 million (£100. 9 million), with pandemic restrictions keeping stores closed at the start of the year and closures starting after that. At the end of 2021, only one flagship store remained on London’s famous Oxford Street. The closures generated savings of $8. 2 million (£6. 6 million), which in turn increased net profit by 124. 2% to a record $9. 2 million (£7. 4 million). This alone shows the luck of its shift to online sales through its shopDisney website, which has allowed the company to continue generating cash.
Conversely, as the graph below shows, its turnover increased by 39% when it peaked at $174 million (£140 million) in 2015, its net profit was well below $3. 7 million (£3 million).
Turnover and profits/losses of Disney outlets in the UK
This has come at a cost as the financial statements note that “as the company focuses on its e-commerce store, significant investments have been made in computer software for this. “As a result, the net price of the company’s software has increased. from just $231,000 (£186,000) to $2. 6 million (£2. 1 million) in 2021, while the price of its tangible assets rose from $2. 6 million (£2. 1 million) to $1. 1 million (£917,000).
The effect was even felt in the financial statements of Disney’s parent company in the US. The U. S. Department of Homeland Security revealed that in 2021 it had incurred “$400 million in asset impairment and compensation packages similar to the closure of an animation studio and the closure of a significant number of Disney-branded retail stores. “retail outlets in North America and Europe. “
The transformation is still complete, as the Disney store on Paris’ historic Champs-Elysees will close in May after 30 years, while Disneyland Paris is a stone’s throw away.
The Disney Store on the Champs-Elysées in Paris is planned for May (Photo by Marc Piasecki/GCArray. . [ ] Images)
That’s not the case in the Middle East, as Patel said the store’s good fortune in Kuwait “definitely paved the way for long-lasting models in all regions. “It’s a whole new world.