World’s Biggest Mall To Get New Disney Outpost

Just over a year ago Disney stunned the market by announcing that it planned to almost double its investment in its Experiences division to roughly $60 billion over the next decade. Theme parks, cruises and consumer products are all covered under the umbrella of Experiences so the announcement heralded the beginning of a whole new world for the media giant. It soon got to work.

Disney is currently in the midst of adding major attractions to all six of its resorts around the world with multiple new cruise ships also on the way as we have reported. Experiences have been a cash cow for Disney since the pandemic receded as lockdowns led to a pent up demand to travel and tourists were prepared to pay a premium for it. However, one area of Experiences didn’t share in this sprinkling of pixie dust.

In May 2021 Disney announced that it would close almost all of its iconic Disney Stores. More than just shops, the Disney Stores acted like banners for the brand. Inside them, ‘Magic Mirrors’ showed animated Disney princesses who told stories to kids, footage of fireworks was beamed onto screens in the shape of trees at closing time to mimic the experience found in Disney’s theme parks and it was even possible to buy park tickets in the stores little more than a decade ago.

The pandemic and the rise of retail giants like Amazon cast a dark spell on the retail operation but Disney didn’t let it go. Instead, it restructured it to focus on its ShopDisney.com webstore and this soon had a magic touch.

By the end of 2022 only a handful of the stores remained in Europe and this led to a collapse in the lease payments made by Disney’s European retail operating company. As we revealed, The Disney Store’s financial statements for the year-ending October 1, 2022 showed that lease payments fell by a staggering 77.2% whilst staff costs dropped 26.3% to $24.9 million (£22.4 million) with the majority of the cuts coming in the bricks and mortar retail category.

It led to the company making a $3.6 million (£3.2 million) net profit on $78.5 million (£70.5 million) of revenue giving it a rosier bottom line than it had in the pre-pandemic years of 2018 and 2019. It doesn’t stop there as it’s financial statements for the following year show that its net profit rose 30.6% to $5 million (£4.1 million) on revenue which remained roughly stable.

The final part of the transformation came in February this year when ShopDisney was rebranded as DisneyStore.com though that wasn’t the end of the story.

In December 2020, just a few months before Disney announced its shift towards e-commerce, it signed an agreement to launch Disney Stores in a completely new market. Instead of bringing the curtain down on the deal when Disney’s retail strategy changed, the local operator of these stores decided to press on with them. It has cast a powerful spell.

Remarkably, one of the few regions where Disney hadn’t launched its stores also has one of the world’s highest concentrations of High Net Worth customers who have a high level of affinity for the brand. The region is the Middle East and, historically, it has been overlooked by Disney. Instead, the media giant has favored other emerging markets like Russia, where the first Disney store opened in 2017, and China, which is home to a huge Disney theme park in Shanghai.

Disney hasn’t had such a happy ending in either market as it had to pull out of Russia in the wake of the Ukraine war whilst its chief executive Bob Iger admitted to CNBC in 2021 that some of his optimism about China has “eroded” in light of its tension with the United States.

Given that Disney heavily invested in China and Russia, despite the troubled track record of both countries, it would be a staggering missed opportunity not to have a single store in the Middle East, especially as it is home to the United Arab Emirates with its retail wonderlands of Dubai and Abu Dhabi. Other US brands have made the most of them.

The UAE is home to more American chains than perhaps anywhere else in the world outside the US. They are found at all price points and not just in retail but food and beverage too. Starting with national chains which are rarely found in other countries, the UAE has outlets of Applebee’s, Black Tap, Buffalo Wild Wings, Chuck E. Cheese, Dave’s Hot Chicken, Dickey’s Barbecue Pit, IHOP and even Orlando-based casual dining chain Tony Roma’s, once owned by Clint Murchison Jr., founder of the Dallas Cowboys.

Then there are regional US chains which are found across the Middle East, such as Kelly’s Cajun Grill, Famous Dave’s Midwestern barbecue restaurant and Minnesotan java joint Caribou Coffee. It’s even more surreal at the upper end of the spectrum as Dubai is home to some restaurants which only only have handful of locations in the US. Upscale eatery Sarabeth’s has five Manhattan outlets and one in Dubai. You can also eat liquid-nitrogen popcorn at a branch of Denver’s Willy Wonka-inspired dessert shop The Inventing Room and tuck into Jamaican food at Miss Lily’s which only has one US restaurant in New York’s East Village.

Even the fast food joints aren’t just the usual suspects as it’s common to see Charleys Philly Steaks, Church’s Texas Chicken, Cold Stone Creamery and Popeyes across the Middle East. It’s the same in retail with chains like Bath & Body Works, OshKosh B’gosh, See’s Candies, Williams Sonoma and Nectar Bath Treats, a Las Vegas-based seller of sculpted soaps whose only international outlets are in Dubai and Abu Dhabi.

Surprisingly, even though many of these chains aren’t seen as being high-end in the US, they are treated with reverence in the Middle East and are often located just steps away from ultra-upscale stores like Tiffany, Rolex and Omega. From the look of the sign above the door, right down to the wallpaper, decorations and light fittings inside, the American chains are almost always sparkling-clean carbon copies of their US 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. There is good reason for this.

A staggering 88.5% of the UAE’s 10.2 million residents are expats so the store and restaurant operators want to make them feel at home. The chains are franchises run by local operators and one leads the way.

Kuwait-based Alshaya Group runs more than 3,000 stores and holds the franchises to many leading American brands including American Eagle Outfitters, Pottery Barn, P.F. Chang’s, Starbucks, The Cheesecake Factory, Shake Shack and Victoria’s Secret. In December 2020 it added Disney to its roster when it announced an agreement to roll out Disney store ‘shop-in-shop’ concepts across Alshaya-operated stores and online in the Middle East. It took more than the wave of a magic wand to pull it off.

Disney’s supremely skilled director of Consumer Products for the Middle East, Sonal Patel, led the talks with Alshaya which began in 2018 and continued through the pandemic. “That was tough,” said Patel in a 2022 interview from her home office. “That was done from where I’m sitting now actually. We managed to sign one of the biggest deals we had in the region from home.”

Patel began working in the retail sector in 1995 with British clothing chain Dorothy Perkins and, after six years, moved into merchandising with department store BHS. After that she took a role at the Disney Stores’ European head office in London where she planned the ranges, managed stock and improved turnover. Patel then moved to Dubai to work for The Landmark Group, one of the largest retail organizations in the region, where she managed three of their brands. In 2014 Disney came calling again and she jumped at the chance.

“There was an opportunity to head up the hardlines licensing business,” said Patel. “It’s very different [than retail]. I knew Disney, I love the brand, and I was excited to work with partners to grow our Disney in-shop presence.”

Patel is part of a highly talented team at Disney’s regional headquarters in Dubai which has broken new ground in retail. They include marketer Ruben Lawrence and country head Nishanth MP, an 18-year Disney veteran who has been behind some of the most memorable studio promotions for Disney’s Marvel, Pixar and LucasFilm franchises. Their hard work has paid off and then some.

In July 2021, Alshaya opened the Middle East’s first-ever Disney Store shop-in-shops in Kuwait, Abu Dhabi and Dubai where they are mainly located in branches of erstwhile British department store Debenhams and childcare retailer Mothercare.

The initial six outlets had a bright new style based on retail toolkits and style guides developed by Disney’s Experiences division in the US. Like their predecessors, the shops sell plush toys, clothing, costumes and more. They are known in the retail industry as concessions – dedicated spaces within a single-brand store that are used by non-related but complementary brands. Looking like slimmed-down Disney Stores, they have sections themed to its most famous franchises, including Pixar, Marvel and Star Wars.

“We all grew up with Disney and we all have a favorite character. We are delighted that Alshaya Group has been able to collaborate with The Walt Disney Company Middle East to bring the magic of Disney, not only to a new generation, but also to life-long fans,” said Alshaya’s chief executive John Hadden.

A retail veteran with more than 20 years of experience, Hadden started his career as Director of store development for Starbucks in Europe, the Middle East and Africa. He then became Senior Vice President of retail property at Alshaya and rose through the ranks until he took the top job in June 2020. Along with Disney’s hard-working public relations team in Dubai, he ensured that word spread about the new stores and Alshaya soon opened further concessions in Bahrain, Qatar and Saudi Arabia.

However, perhaps the most spellbinding development came in November 2022 when the Middle East’s first-ever standalone Disney Store opened in Kuwait soon after Disney had closed its shops elsewhere around the world.

Kuwait’s 800 square meter store sits inside The Avenues which, with 1,100 stores, is one of the world’s biggest malls. A huge screen in the shape of a scroll sits above the entrance to the Disney Store and plays scenes from classic cartoons. Inside, sketches of Mickey and Minnie line the walls, a huge banner shows the fairytale castle that stands in the middle of Disneyland in California and a silvery statue of Dumbo hangs from the rafters. It brings the Disney Stores bang up to date and clearly hit the spot as 1,000 shoppers turned up on opening day alone.

“We couldn’t be more delighted with the opening of the first standalone Disney store in the region,” said Hadden. “This stunning new landmark is more than just a store; it’s a destination that brings memories to life and truly offers a one-of-a-kind retail experience to children and families that only Disney can deliver.”

Summing up the importance of the opening, Patel said “our stores represent our entire brand and help guests engage with products and staff.” She added that “it’s been very nice to drive background presence in the region and understand the cultures and how we can provide them with Disney magic that makes sense for that market.” She also praised the efforts of her boss as well as Disney’s local, regional and global teams that supported the launch. “This was new to everyone, so we were all finding our feet, but we learned a lot as a team.” This was just the start.

In summer this year the Middle East’s second Disney Store opened in Qatar’s Doha Festival City mall. A soaring statue of Cinderella sits in the center of the sprawling store underneath a circular screen which looks like a skylight and shows shooting stars flying by.

Alshaya now operates 30 shop-in-shops along with the two stores and there are more to come. The Dubai Mall, recognized by Guinness as the world’s biggest shopping center by area, recently put up a construction wall advertising that a new Disney Store is coming soon.

Spanning 12 million square feet of floor space, the Dubai Mall is home to more than 1,200 shops, a full-size ice rink, a Kidzania theme park, a virtual reality park, one of the world’s largest aquariums, an electric go-kart track and a 24.4 meter long Diplodocus skeleton. The entertainment even continues outside the mall thanks to an elaborate fountain show which was developed by WET Design, the firm behind many of Disney’s most famous fountain displays.

The mall is run by local property developer Emaar which is a giant of themed entertainment and not just because of the Dubai Mall. It also operates the nearby Dubai Hills mall which is home to Storm Coaster, the world’s fastest vertical launch rollercoaster.

No expense was spared as the Storm Coaster queue features a simulated elevator ride developed by British firm Holovis which created the stunning show at the heart of SeaWorld Abu Dhabi as we have reported. The coaster itself was made by Swiss engineering firm Intamin, which also made Disney’s Incredicoaster and the Velocicoaster at Universal Studios Orlando.

Emaar even develops intricately-detailed themed residences including The Old Town in Dubai which looks like a fairytale fort from the pages of One Thousand and One Nights. Old-fashioned Arabian oil lamps hang on the walls of its short sand-colored towers which are crowned with battlements and have old-fashioned dark wooden doors with over-sized iron rivets and circular iron handles hanging in the middle.

It packs a punch and in 2023 Emaar made a net profit of $3.2 billion (AED 11.6 billion) on revenue which rose 7% to $7.3 billion (AED 26.7 billion). In the same year the Dubai Mall welcomed a record 105 million visitors reportedly making it the most visited place on earth. The footfall makes it an ideal location for Disney to test the level of interest in its products.

The media giant historically entered major new markets with its stores and if there was enough interest it opened a theme park there. With the demise of its stores, cruise ships have taken over this role and as we recently reported, Disney also developed a transportable mini-theme park which debuted in Saudi Arabia last year and could be used to test new markets before committing with a permanent site.

Similarly, the success of Disney’s partnership with Alshaya proved that the franchise model is a dream ticket so it too has been rolled out elsewhere. In 2023 Disney signed a partnership with East Asian mall owner Hyundai which has opened six Disney Stores in South Korea since then and in September this year even launched its first pop-up featuring discounted items and an augmented reality fitting room. In the same month the first Southeast Asian Disney Store opened in Manila which was also a franchise deal with a local operator.

There are now just 20 Disney Store Outlets left in US along with one flagship store in New York. They are joined by stores in London and Dublin, the six in South Korea, one in Manila, 42 in Japan and 32 in the Middle East so if you want to keep track of the latest trends in Disney’s retail strategy, the direction to look is east.