Disney has helped to shape the American culture. Over the years, a Disney store has become an institution – a symbol for middle-class families living the dream. However, today, it looks like the Magic Kingdom is crumbling down.
The largest share of Disney’s public – middle-income households – are struggling to afford Disney tickets, products, and streaming services, and that is putting the company in a very complicated financial situation. With expenditures surpassing profits, the entertainment giant is now dealing with some billionaire losses that are leading to mass layoffs, business shutdowns, and an internal reorganization as it tries to survive the storm.
CEO Bob Iger is warning about major challenges for 2023, and millions of fans will likely be devastated to lose their local Disney stores in the months ahead.
These days, the remaining Disney Stores are few and far between. They’re also mere shadows of their former selves, lacking the unique features that defined the franchise at its peak and largely today serving as an outlet for parks and online merchandise that failed to sell. It seems like the magic of Disney has been no match for the downturn in mall foot traffic and the general crisis of brick-and-mortar retail.
As of today, the family entertainment and media enterprise has just 22 stores in the U.S. But what could possibly have happened to bring down such a beloved store at malls across America?
The answer is not that simple, but one thing is abundantly clear – the company has fallen victim to what made it so successful in the first place – all the care that was put into its creation and management that many of these locations became too expensive to keep running. That’s why similar retailtainment companies – such as the Warner Bros. Studio Store – proved unprofitable.
In the few stores that are still standing, prices are rising much faster than what Disney fans can pay. A report by Business Insider, citing an analysis run for the outlet by travel firm Touring Plans, revealed that food and souvenir prices at Disneyland parks have jumped by as much as 33% since last summer. By comparison, the Bureau of Labor Statistics reported earlier this month that the country’s Consumer Price Index stands at 5%, meaning that Disney prices are outpacing inflation in the U.S.
This month, the enterprise is closing its Star Wars-themed hotel, the Star Wars: Galactic Starcruiser, just one year after opening. With trips starting at $4809 for two guests in a standard cabin and going upwards of $6000 for a family, it was out of reach for many visitors from the start. Over the past year, the company has also shut down several of its retail locations, according to Fox Business.
Earlier this year, the company said it wants to shut down 20% of its brick-and-mortar stores by the end of the year as a part of a new reorganization plan. Unfortunately, the closings may be the least of Disney’s problems. The enterprise is facing a media industry in turmoil, plunging cable subscriptions, a still-recovering box office, massive streaming losses, skeptical shareholders, management changes and layoffs, and growing labor disputes with employees. That’s a lot for CEO Bob Iger to handle.
The decay of this global media leader symbolizes the downfall of our culture as a whole. It unveils the dire state of our economy. The breakdown of our middle class. Sadly, Disney is not alone, and we will continue to see many major companies in America going down the same path.
Video and article cross-posted from Epic Economist.
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