Wednesday morning, the company unveiled the prototype for a new Disney Store, which executives hope will jump-start a recovery of its ailing consumer products division.

The new store is brighter, contains more merchandise and has a modular design that can be changed quickly to promote new products or Disney movies or theme park attractions.

While the square footage of the new design is similar to the old stores, 40 percent more selling space is created by putting most of the merchandise on the selling floor, eliminating the need for a large back room and the staff associated with maintaining inventory.

What customers will notice first is the lack of static window displays, which cluttered the front of the old store and framed a narrow entrance. The glass displays, featuring statues of Mickey Mouse, Goofy and other characters have been eliminated, leaving an open, more inviting entry way.

``You couldn't really see into the old store because of the animated window,'' said Tom Park, executive vice president of Disney Store Worldwide.

The left wall features a series of screens, which display scenes from Disney movies, interspersed with shots of children wearing costumes from the films sold in the stores.

One key feature of the new design is the emphasis on technology. The new stores feature an area where children can sample some of Disney Interactive's computer games.

But the most prominent feature is the computer kiosk that allows customers to order items not sold in the stores or book hotel rooms and vacation packages at Disney's theme parks and cruise lines. The keyboard even features a device for customers to swipe their credit cards.

``We opened the first Disney Store in 1987 and our message was, 'Put a little Disney in your hometown,''' Park said. ``What this store does is celebrate Disney as a multimedia company.''

Disney is hoping its new stores and recently announced licensing initiatives will be the start of what executives admit will be a long turnaround for the consumer products division, which, along with Disney studios, is in need of a tuneup.

In the latest fiscal quarter, which ended June 30, revenues from the division decreased 11 percent, including a drop of $56 million in revenue from licensing and an $8 million loss from its 700 Disney Stores around the world.

``It's an attractive strategy,'' said Mike Kupinski, an analyst at A.G. Edwards & Sons. ``On a long-term basis, it could re-ignite some growth in that sector.''

Kupinski thinks it could take up to two years to make the division profitable again. The Disney Stores contribute only about 6 percent to the consumer products division. Most of the income comes from licensing its characters to third-party manufacturers.

Company officials also stress that the turnaround, which includes recent licensing deals with both Hasbro and Mattel, will take time.

``Of course, the changes being made in licensing and retail can't happen overnight,'' Eisner said in a speech given recently to Wall Street analysts. ``But I am confident that in a few years, we will be able to look back and see Disney Consumer Products as one of our company's most powerful drivers.''

The new stores not only display more merchandise, but are also less expensive to run. The lighting, for instance, makes the stores about 30 percent to 40 percent brighter, but new technology reduces the cost of installing the lighting by $7,000 per store. Longer-lasting bulbs also reduce the annual costs of lighting the stores by $40,000 per year for each location, Park said. Park said about 350 to 400 of the 500 stores in North America will eventually be remodeled. The remaining stores, typically in smaller malls, will either be closed or receive more minor alterations.

[Posted 10/05/2000]