The Walt Disney Company (NYSE: DIS) is closing at least 60 of its retail stores across North America as it attempts to maximize profits in the wake of the Coronavirus Pandemic.
The company suffered one of its worst losses in history last year, before showing signs of recovery in recent earnings reports. Retail store closures should have a minimal impact on the brand while shedding significant operational costs.
Downsizing the Retail Component of Disney
The closure of at least 60 retail stores in North America will help to make Disney leaner. The company has positioned the move as a response to consumer demands, saying that the Coronavirus Pandemic has changed what consumers want from retailers.
Stephanie Young, the president of the Consumer Products, Games, and Publishing division of the company said that leadership is planning to create a more “flexible” and “interconnected” experience for consumers, primarily through the eCommerce model.
There are close to 300 Disney retail stores scattered around key global markets, with around 200 located in North America. Both figures will now shrink by at least 60 stores.
It’s not the first cost-cutting measure that the company has implemented during the Coronavirus Pandemic. It has docked all its cruise ship fleet and it won’t be operational until at least June. This was to meet government restrictions while also minimizing Disney’s costs and exposure to risks and liability during the pandemic.
Huge Job Losses for Disney Workers
This is the latest blow to Disney’s workforce, with the company having announced late last year that it would lay off up to 32,000 workers in 2021. It’s unknown how many workers will be affected by Disney’s retail store closures.
Investors will see the upside in this latest decision. Job losses are bad news for the economy but good news for Disney’s bottom line. The stock has rallied 25.46% over the past three months, and with unfortunate but necessary decisions like the recent announcement, the company’s long-term profitability and viability will be protected.
More upside is predicted on the stock with a price target of $205.26, making it an interesting investment opportunity this quarter.
You may be interested
Job Hiring is Picking Up as Employers and Consumers Gain ConfidenceLamont J - March 29, 2021
The recent government stimulus for small and medium-sized businesses, personal stimulus checks, and declining Coronavirus cases, are all great news…
Fed Could Maintain 0% Interest Rate Until 2024Adam R - March 26, 2021
The Federal Reserve is holding its target interest rate in a range of 0.00% - 0.25%, even while the economy…