Here’s Disney’s New Expansion Strategy
Children who love the Disney cast generally begin to competently demand prince or princess swag somewhere after the age of 3. Before then, it’s up to mom and dad to clothe their infants, and IBISWorld estimates they spend about $10 billion a year doing it. That $10 billion is why Disney (NYSE:DIS) is opening a Disney Baby retail store in Glendale, California, and creating baby sections in its over 200 U.S. stores.
“This gives Disney the opportunity to reach out to moms when magical moments begin,” says Disney President of Consumer Products Bob Chapek. Disney Baby will be offering apparel, feeding and bedding products, and even travel and vacation planning.
With 1.6 million new moms each year, babies are a big market. However, Steven Keith Platt, director at the Platt Retail Institute, warns that “if the price point is too high, it won’t sell at Walmart,” which would be a major outlet for the products. But Platt adds, “no one else has the brand name and magic that Disney has. It should do well.”
IBISWorld expects the industry to grow steadily for the next five years, with consumers focused on brand names. Although this is great news for Disney, these companies will surely feel the competition: The Children’s Place (NASDAQ:PLCE), Baby Gap (NYSE:GPS), Carter’s (NYSE:CRI), and even Target (NYSE:TGT).
Investing Insights: Here’s How to Bet on a Baby Boom.