TIME: Almanac 1995

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<text id=94TT0567> <title> May 09, 1994: Business:What's Up Doc? Retail! </title> <history> TIME--The Weekly Newsmagazine--1994 May 09, 1994 Nelson Mandela </history> <article> <source>Time Magazine</source> <hdr> BUSINESS, Page 64 What's Up Doc? Retail! </hdr> <body> First Disney, then Warner, struck gold with studio stores at the mall. Now everybody wants to join the Toon Age. By Richard Corliss--Reported by Elizabeth L. Bland/New York, Bruce Crumley/Paris and Jeffrey Ressner/Los Angeles It is among the deepest of compulsions in Western civilization: to own what we love. Sometimes the object of our possessiveness is a house or a spouse. For Lise, a six-year-old from Neuilly-sur-Seine, France, the demands are simpler. She wants three dolls, among thousands on display in the huge, sumptuous Disney Superstore on Paris' Champs Elysees. Lise and her mother are in delicate negotiation. Maman suggests either the Cinderella doll or a pair of less expensive figurines; Lise wants it all. This time Mother wins. But they'll be back for more. They always come back. And when they are grownups but kids at heart, they gravitate to the Warner Studio Stores. At a Warner outlet a few steps from the Disney emporium in Atlanta's Lenox Square shopping complex, the place is crawling with twentysomethings. At the back of the store, children can climb into Marvin's Rocket Ride and take a push-button blast through the solar system; but kids are scarce here: 85% of the customers are adults. Heather Bamberg, 24, forages until she finds a gift for her godchild: a cap with the Tasmanian Devil logo. More often, though, Bamberg shops for herself. "The themes here remind me of my childhood," she says, surrounded by icons of Bugs Bunny, Daffy Duck and the Roadrunner. "It's like looking in a museum. I never come to the mall without coming in here." Kid stuff has been surefire ever since parents realized they could fend off a child's tears by handing over the artifact of a cartoon rodent. "Walt Disney started it all," notes Michael Eisner, chairman and CEO of the Walt Disney Co. "He was the first man to create consumer products out of filmed entertainment." And so for decades Mickey Mouse and other Disney icons shuttled between love and neglect: they were purchased by doting parents, then cradled in children's arms, then placed on bedroom toy shelves, then exiled to attics, then discarded in sidewalk rummage sales, then discovered by antique dealers who sold them at premium prices. And every few years a new generation of child consumers repeated the process and replenished the Disney coffers. But now this cottage industry has exploded. Welcome to the Toon Age of worldwide retailing, an age when Warner's fearsome Tasmanian Devil becomes a cult figure for kids, dads and inner-city gang members; when no little girl feels chic without her Princess Jasmine dress (from the smash Disney film Aladdin); when Paris designer Karl Lagerfeld ornaments the classic Chanel hat with impish Mickey Mouse ears. Hollywood's animated ephemera are Big Business everywhere: in the Disney themelands and at Warner's Six Flags parks, at chains like K Mart and Toys "R" Us, in sports-stadium concession stands (Michael Jordan, meet Bugs Bunny) and on midtown sidewalks, where overnight entrepreneurs peddle Taiwanese knock-offs of your favorite cartoon characters. It took decades, but Disney (and then Warner) hit on a bright idea: eliminate the middleman and market directly to an avid public. In malls throughout the U.S. and around the world, the 268 Disney Stores and the 67 owned by Warner sell not just the usual T shirts and gewgaws but the whole corporate cartoon experience, once removed. These outpost embassies for the Magic Kingdom and Warner's more raucous cartoon realm are more than stores: they are fun fairs, playgrounds, date destinations, suburban social centers. And as they entertain moms and their kids, teens and their older, upwardly mobile sibs, these stores also impress the industry analysts. Says Kurt Barnard, publisher of Barnard's Retail Marketing Report: "Disney and Warner are taking advantage of characters that America has grown up with, that have endeared themselves to the American family for generations. It is a very powerful sales point: leveraging the fame and the hallowed position that these characters occupy in the American home." There are also powerful profits to be made from quality merchandise featuring barnyard critters. Neither company discloses itemized financial records, but industry analysts estimate that last year the stores' revenue was $465 million for Disney, $380 million for Warner. These are robust figures; they amount to 54% of Disney's total domestic box-office take and 39% of Warner's. Not bad for a fledgling industry where the flop factor is reduced and the stars aren't paid $10 million a picture. Analyst Isaac Lagnado of Tactical Retail Solutions, applying the common measuring device for retail success, says Disney's stores sell about $600 worth of product per sq. ft. per year--50% above the average take for a prosperous mall store. Warner's figure is an even gaudier $750. The number may be skewed because the company's showcase stores at Caesars Palace in Las Vegas and on Fifth Avenue in Manhattan do business considerably above the Warner norm, but no one is complaining. Last Christmas, says Peter Starrett, president of Warner Bros. Worldwide Retail, "the Fifth Avenue store did twice the volume we expected." What any good executive can expect is that success breeds imitation. Where Disney and Warner go, competitors will follow. Sony, which owns the Columbia Pictures library, has opened high-tech prototype stores in its Manhattan headquarters that emphasize the parent company's electronic equipment but also feature bibelots from current sitcoms (Seinfeld coffee mugs, Ed Bundy WHY ME? T shirts) and old movies (Three Stooges dolls, an On the Waterfront I COULDA BEEN A CONTENDER sweatshirt). This month, in the same building, the company will unveil Sony Wonder, a free exhibition space with the first permanent interactive movie theater and other beguilements. A London Sony store is in the offing. Bob Wallen, Sony Signatures' senior vice president for licensing and merchandising, knows that his company, unlike Disney and Warner, has no cuddly corporate fame to leverage. "There was no past for Sony," he says. "We are breaking new ground." Other companies are tentatively trodding that ground. MGM plans to open a store in its headquarters in Santa Monica, California, this summer, and MCA-Universal is pondering an expansion of the retail activities that are currently confined to its theme parks in California and Florida. But perhaps all the newcomers should ponder the fate of other studio retail ventures. At the apogee of Bart-mania, a Simpsons store opened in Los Angeles and quickly folded. Jay Ward, producer of Rocky and Bullwinkle, has a tiny store on Hollywood's Sunset Boulevard, but it is no cash cow or money moose. Hanna-Barbera (The Flintstones, The Jetsons) operated two Los Angeles stores but closed them after Ted Turner bought the company. So when the Diz Biz people first thought about retail stores, the notion was anything but a sure thing. To make it work required a happy confluence of factors: a resurgence of appealing films like The Little Mermaid and Beauty and the Beast from Disney's cartoon unit, the company's revived marketing savvy under Eisner and the rise of the mall culture. "It's become instinctual for us," says Eisner, "that we do something either really, really big or really, really small. With these stores, we wanted to bring the Disney feeling into a mall environment but not try to dominate the mall." In March 1987 Disney opened its first studio store, at California's Glendale Galleria, 30 miles from Disneyland. The store was an immediate hit; and rather than eating into park revenue and attendance, it helped promote them. The company now has stores in the U.S., Canada, Britain, Germany and Japan. The Champs Elysees Superstore and another in Frankfurt opened late last year. And Disney is planning stand-alone stores on the Warner model in upmarket venues like Michigan Avenue in Chicago and Fifth Avenue in Manhattan. Local preferences keep the Disney salespeople hopping. In the British stores Winnie the Pooh is the top seller. France prefers Bambi and Thumper. Germany goes for Scrooge McDuck and the Jungle Book denizens, while the Japanese choose good old Mickey and his significant other. But in this worldwide Minnie-empire, the Disney imprint is everywhere evident, from the perkiness of the store staff (who really do whistle while they work) to the ability of toddlers the world over to wheedle cash from their dutiful parents. Sixty years after Disney introduced the Mickey Mouse watch, Eisner & Co. has perfected Walt's theory: everything sells everything else. Disney movies bring customers into the stores, where they are exposed to a promotional blitz of products and wall videos that aim to recycle folks back to the parks and theaters. "This summer," says Eisner, "the stores will be geared to our new animated feature, The Lion King. You can also buy tickets for the park there. You can learn about the Disney Channel. It's all woven together." The Greeks had a word for it: $ynergy. Warner got its first hint of a synergistic gold mine by monitoring the sales of animation cels (individual painted frames of a cartoon) on the art market. Cels of the sort the company had capriciously destroyed in the early '70s were selling for upwards of $10,000 a decade later. These works are a prestige staple of the Warner stores. As Chuck Jones, ace director of Warner cartoons, notes, "The French Impressionists were an art form that became a business. Animation is a business that became an art form." Warner stores take their cue from Jones' artwork: witty, deadpan, delirious. The Manhattan store, across 57th Street from Tiffany, is already a pop-cultural landmark, with its handsome facade of cartoon stars in bas relief and giant canvases parodying works of art (Wile E. Coyote as Whistler's mother, Daffy Duck in September Morn). The glass elevator rises, and from outside you can see it being "pushed" by a life-size plastic Superman. Gremlins (from the 1984 Warner comedy hit) can be seen in the machinery under the escalators. Prices range from $10 for a 500-piece Mad magazine jigsaw puzzle ("500 times more challenging than our previous `one piece' puzzle!") to $4,400 for a fancy jacket by designer Jeanette Kastenburg. This store is quite a trip. But will shoppers take the Warner trip often enough and for long enough? Jack Trout, president of Trout & Ries, a marketing-strategy firm in Greenwich, Connecticut, is skeptical. "The problem with having your own retail outlets," he says, "is that you have to keep selling this stuff year in and year out. You've got the rent, you've got the bodies. Disney is set to last because of its cartoon features. They bang these babies out every year; that gives them incredible possibilities for merchandise. But with Warner, once you get beyond Looney Tunes, what have you got? This whole retail thing is a lot of guys chasing a buck. They say, `Disney can do it, why can't we?' Well, Disney has a horse." David Leibowitz, director of research at Republic Bank of New York, cites an old Wall street adage. "Not all trees grow to the sky," he says. "No matter how hot your retailing concept is, it doesn't grow at exponential rates forever." But for now Disney (with its solid base and new stable of stars) and Warner (with a duck, a coyote and a wascally wabbit whose personalities are as pungent and enduring as any in movies) have a lock on the zeitgeist. Today popular taste is ruled by the gaudy, the facetious and the nostalgic. The merchandise sold in the studio stores speaks to all these impulses. It's the cultural-industrial complex at its acme: iconography retooled for fun and profit. As for consumers, the stores' artifacts serve as a commercial Rorschach; they let us wear who we think we are. Mickey? Daffy? Jasmine? The Taz? That devil--why is he so popular? We asked a perky cashier at Warner's Fifth Avenue store. "He's vicious, I guess," she surmised sunnily. </body> </article> </text>