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Disney goes direct-to-retail in footwear

Disney Consumer Products is bringing more of its licensing business in-house this year, having recently inked a direct-to-retail deal with Payless to develop an exclusive line of kids shoes. The multi-year partnership will see Payless source, market and sell the new line in its 4,500-plus stores, although the two companies will work together on design and retail marketing initiatives.
January 1, 2007

Disney Consumer Products is bringing more of its licensing business in-house this year, having recently inked a direct-to-retail deal with Payless to develop an exclusive line of kids shoes. The multi-year partnership will see Payless source, market and sell the new line in its 4,500-plus stores, although the two companies will work together on design and retail marketing initiatives.

Featuring characters from Mouse House franchises such as Disney Princesses, Power Rangers, Winnie the Pooh, The Incredibles and Finding Nemo, the first shoes are scheduled to roll out this spring, with an expanded line due in time for the back-to-school season. Prices will range from US$12 to US$22, which is on par with other licensed lines.

Both Disney and Payless claim this streamlined deal model will have a bigger impact on value than price. Payless couldn’t divulge details about the shoe design at press time as the line is still in development, but the company says working directly with the Disney team will enable it to feature more on-trend styles.

Providing consumers with more bang for their buck is an admirable goal, to be sure. But there are other benefits to be had from this type of model. For one thing, it eliminates the need to pay royalties to a licensee, meaning more money goes back to the property owner. And it also gives Disney more direct control over the creative direction of its licensing programs.

The Payless deal isn’t the first direct-to-retail partnership Disney has forged, and it won’t likely be the last either. This past summer, the company connected directly with U.S. grocery retailer Kroger to produce Disney Magic Selections food and health & beauty products. But the company isn’t ready to forgo traditional licensing models altogether. For the time being at least, Disney plans to continue working with its stable of footwear licensees. KC

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