Media Money with Julia Boorstin

Disney's Retail Revamp

Disney is taking inspiration from its board member Steve Jobs, whose Apple stores have thrived despite the downturn in consumer spending. With some help from Apple retail strategist and Disney Imagineers, The Magic Kingdom is launching a complete over-haul of its stores, building on the Apple model: retail as immersive shrine to the brand. For Disney that means creating an entertainment experience with areas of the store devoted to different franchises — Cars, Fairies, Princesses, and Toy Story. At the heart of the new stores will be an interactive theatre where kids will be able to pick between hundreds of video options and interact with Disney talent via satellite.

The goal is to build a destination kids will beg their parents to visit, and where they'll spend so much time, parents won't mind shelling out some serious dough. For this Disney will spend between $750,000 and $1 million to revamp each of its 340 stores in the US and Europe. It will open the first three new stores in May and will continue the roll out over the next four years, plus it'll open a handful of new stores, including a flagship in New York's Times Square.

Disney's been trying to figure out how to handle its retail presence, going back to 2004 when the company sold its US stores to The Children's Place Retail Stores. The stores didn't go anywhere and were starting to look quite ratty, so the company bought them back in 2007. The stores are still a small percentage of the company's overall revenue — generating about $700 million in annual revenue, about a third of Disney's consumer products business. But the new stores could boost the division as soon as next year. And think about the potential for Disney's other businesses: the more people are enchanted by the store experience, the more likely they are to want to visit Disney parks, see Disney movies, and go on Disney cruises. The list goes on...

Let's not draw too close a comparison between Apple and Disney — just as the companies are very different, the retail stores will take a different approach. While Apple products are available anywhere — from Best Buy to Wal-Mart — Disney plans to make 90 percent of the products in its new stores entirely exclusive. So other than say, DVDs, you're looking at a whole array of new unique products.

So who's next? With all the consolidation in the media space, rivals are sure to be examining Disney's new approach. Time Warner could potentially look to retail stores as a way to capitalize on its DC Comics and Warner Brothers brands. Universal Studios, which has retail stores, including a couple at Universal Citywalk, where CNBC's LA bureau is located, could also re-examine its retail presentation.

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