Disney to dump Fifth Avenue spot

[Melanie]

Disney to dump Fifth Avenue spot

The company cited high rent as the reason for its decision not to renew a lease at the Fifth Avenue World of Disney store, considered Disney's flagship retail spot.

August 08. 2008 2:01PM
Adrianne Pasquarelli


Walt Disney Co. announced Friday that it will not renew its lease for its World of Disney store at 711 Fifth Ave. when it expires in 2010 because of hefty rent increases.

The entertainment conglomerate notified its 220 store employees, called “cast members,” Thursday and Friday that it will be leaving its current 36,000-square-foot space, Disney’s only Manhattan location.

“The Disney Stores are going to be reviewing other potential locations in the Manhattan retail market,” said spokesperson John Nicoletti.

Speculation abounds for the company’s Big Apple relocation. Some in the real estate industry expect Disney to move to an even more tourist-laden area like SoHo or Times Square. The company formerly operated a retail store on 42nd Street and Seventh Avenue, a space which has since become a Champs store.

Robin Abrams, a Lansco Corp. broker and former chairwoman of the retail committee for the Real Estate Board of New York, expects Disney to favor Times Square over SoHo.

“For the most part, [Disney’s] customers are comprised of families and kids—in SoHo, you get a lot of teens and adults who are probably not as provoked to go in and buy a Mickey Mouse shirt,” said Ms. Abrams.

Even a company of Disney’s magnitude is not immune to the current economic downturn. For the nine months ended June 28, Disney reported a 3.8% drop in net income, compared with the same period a year before. Revenue for the nine-month-period ending June 28 increased 6.8%.

[GrumpyFan]

Hmm, sounds like a smart business decision, but sad for the CMs who will lose their jobs. Although, I think it would be a bad idea for them to completely pull out of NYC. So, hopefully a new store location will be made known real soon.

[Clay Ransone]

I liked the WOD in New York on my one visit there. With that said I hated the location. I was into for the NIT semi-finals and it was a long walk from Madison Square Garden to the WOD. Times Square would be a much better location for the New York WOD.

[BronxTigger]

:cry:

I can't imagine them leaving the NYC area altogether...there are a LOT of Disney people around here. If you ever look at that DVC map at any of their kiosks that tell how many members are from each state, NY and NJ and the area have some of the highest numbers.

I don't think anything is wrong with the location; it's in a major shopping district. But 5th Avenue is known for high rents. My DH is joking that they'll have to move to 1st Avenue to find cheaper rent. Personally, I can't see them moving to SoHo (for the same reason as listed in the article), but I can't imagine rents in Times Square would be significantly less than on 5th Ave. They may get more traffic there though. Maybe 34th Street would be an option for them too. Who knows...now I'm just thinking "out loud" and rambling.

It is a cool store; I like being able to get my "Disney fix" locally and it really is the same stuff they sell at WOD in WDW and DLR; it's NOT a Disney Store like in malls. Well, I'll just have to go a lot now before it moves. ;)

[ccp1]

5th Avenue was a great location because it was a couple of blocks away from Radio City, the NBA store, and practically next door to the Apple Store and FAO Schwartz.

That being said, a location in Times Square puts it close to the theaters that house Lion King, Mary Poppins, and Little Mermaid.

SoHo wouldn't work IMHO.

[MinnieMommie]

This is very disappointing news! :(

[Maleficent's Dad]

Bummer. :sadwave:

I just hope the new location will still have a character meet & greet. One of the coolest things about the store - head into Manhattan for your fix.

I do agree, SoHo would not be a great "fit." They did have a store next to the New Amsterdam theater, that's essentially Time's Square, so I'm not sure of the logic at work here... :scratch:

[Faver]

I hope they move to Times Square! When I first heard the news, I was so upset... I love that store!

Hopefully there is room in Times Square...it's getting pretty tight there.

[TheRustyScupper]

1) I could never understand the 5th Ave location.
2) It is so far out of the way for tourists families.
3) Times Square is a far better location.
4) It is a main tourist-draw for the city.

[BronxTigger]

1) I could never understand the 5th Ave location.
2) It is so far out of the way for tourists families.
3) Times Square is a far better location.
4) It is a main tourist-draw for the city.

There are a TON of tourists in the are where WOD is now. Central Park, FAO Schwartz, the Apple Store, and a TON of other flagship stores (and the Trump Tower that is seen on The Apprentice) are all within blocks of the current WOD location.

But yes, Times Square is even MORE of a tourist location than 5th Ave near Central Park.

[NJDad]

Seems to me Times Square has more tourists than anywhere in the city and has more people killing time (waiting for Broadway showtimes) than anywhere else.

Even us nearby folks end up there with time on our hands and rarely end up near the current store in the same boat.

[brownie]

At least they seem to be considering the idea of relocating and not simply shutting it down. And they're giving the cast plenty of notice, which seems to me they'll be moving as opposed to closing.

[Aurora]

Bummer. It is a beautiful space and really feels like Disney. I can see them wanting more traffic for less rent, though. It isn't by any means out of the way now, but relocating in Times Square makes sense with the Disney theaters and the Toys R Us store over there.

I wish they would re-open a "REAL" Disney Store in Chicago. The Michigan Avenue store was one of the only Disney stores a la WOD but went the way of the dumbed-down version along with all the others. Now that Children's Place has sold them back, maybe we'll get the real deal again.

[meldan98]

I loved the WOD in NY, but could see how they would want to move to Times Square. The store on 5th Ave might just be too small for what they are wanting to do. I can imagine a BBB, a larger character area, a place for birthday parties, and places to sell more merchandise for all of the Broadway shows going on, etc. Times Square would be a perfect location. I think that they would be able to find a spot that is big enough for them to expand in Times Square.

[mouseketeer mom]

Wow! I can't believe it! We just had part of our summer NYC meet there!

[ElenitaB]

Gosh, if you think that real estate on Fifth Avenue is expensive, they're in for a shock when it comes to looking at Times Square proper. My firm's North American headquarters anchors the southwest corner of Times Square. In the five years (?) that we've been there, the area has changed a LOT between new construction, the arrival of NASDAQ and ABC Morning News, and the invasion of the chain store/restaurant. That said, rents have increased dramatically.

But I can't think of a better location for the WoD in NYC, due to the proximity with the theatres where Disney productions are playing. There was a nice chuck o' multi-level space on 42nd St (between 7th and 8th, very close to the Hilton) but that was grabbed up by Dave & Buster's. There's the old space where the Warner Bros store was, that has never been occupied again (in the building where the ball drops). And immediately south of there is the building that was to be Arthur Anderson's headquarters (right before their demise), which I think is known as 6 Times Square. There is also a large retail space on the ground level in that building.

It will be interesting to see how this plays out...

[BronxTigger]

The news that I consider to be the worst part is that it will no longer be under the Parks Division as a WOD, but it will change to a regular Disney Store and operate under that division.

From an AP article (from Newsday):
(Bolding is mine)

Disney store on Manhattan's 5th Avenue is closing

August 11, 2008

NEW YORK - The Walt Disney Co. plans to close its World of Disney store on Manhattan's Fifth Avenue when the lease expires in 2010 and replace it with a smaller store elsewhere in the borough.

Spokesman Gary Foster says the company behind such lovable characters as Mickey Mouse, Donald Duck and Winnie the Pooh and the "Toy Story" and "High School Musical" movies is scouting locations for the new store.

World of Disney stores like the one on Fifth Avenue near St. Patrick's Cathedral are operated by Disney's parks and resorts division and are bigger than the chain stores operated by the consumer products division. The new store will be part of the chain.

The Disney stores sell products including toys, clothes and games.

Disney used to operate a store in Times Square.

[meldan98]

Well, that is a total BUMMER!!! I've only been to NYC once and that was such a neat place to visit.

[conorsmom2000]

The news that I consider to be the worst part is that it will no longer be under the Parks Division as a WOD, but it will change to a regular Disney Store and operate under that division.

From an AP article (from Newsday):
(Bolding is mine)

Wow, that part really disappoints me. My DH just gave me the news that they were closing, so of course I hopped right over here to see if it was potentially just relocating - but knowing it won't be part of the Parks Division is a real shame. I really loved the store because it was like stores in the Parks - the regular Disney store is fine, but I like getting my kitchen items, barware, etc. there. :(

We didn't mind the Fifth Avenue location at all, but we'd have gone no matter where it was.....now, I'm not so sure. We'll have to see what happens....

[Melanie]

The news that I consider to be the worst part is that it will no longer be under the Parks Division as a WOD, but it will change to a regular Disney Store and operate under that division.

Yeah, now that's bad news! :(

I remember going into the one that was previously next to the New Amsterdam, and it was nothing special. Hopefully the new one will be on a grander scale, but not having theme park merchandise is a bummer.

[BronxTigger]

Yeah, I was thinking that maybe the AP could have reported it wrong, but both Newsday and the AP are reputable news sources, so that's unlikely. :(

[MegaDisney]

From the NY Post:

RETAIL mouseketeers tell us that Disney is this close to a monster deal with Vornado Realty Trust for a mega flagship in Times Square.

Disney has been sweeping Times Square for years, hoping to find an appropriate venue to replace the Mouse House's current flagship store at 711 Fifth Ave., where the lease for more than 60,000 feet is up in 2010.

In fact, brokers say they've been told that space in the Coca-Cola Building can be made available earlier - if they lease it.

Sources say Disney very much wants to relocate to the center of the action that it essentially spawned with its renovation and 1997 opening of the New Amsterdam Theater on W. 42nd St.

But the area's high rents are now making it a victim of its own success.

Vornado has been asking an eye-popping $1,000 a foot for the 60,000 feet that consists of the former Bar Code triplex, the Virgin superstore and the four former Lowe's movie theaters.

The pricing however, is on par with the American Eagle deal for the former HoJo site on Broadway that we told you about first.

With spectacular signage, multiple levels and lots of configurations for exits and entrances, Disney creativity can run wild. Sources said Vornado already has interior renderings in its offices.

Vornado Chairman Steve Roth, who brought H&M to its first city location on Fifth Avenue, is known for biding his time for the right tenant and the right timing.

Indeed, IHOP was keen on flapping its pancakes at the Times Square location, but he wasn't.

The British cheap-chic retailer Topshop also toured the Times Square space, but when they balked at the pricing, Roth corralled them at one of Vornado's Soho properties, where the chain will open a much-anticipated store in October.

No one from Disney or Vornado returned calls for comment.

*


Post Properties is trying to bail out of its two luxury rental buildings in the city and others around the country to help raise cash for the Atlanta-based company.

A sale of the 199-unit Post Toscana at 389 E. 89th St. and the 138-unit Post Luminaria at 385 First Ave. would add approximately $250 million to the company's coffers.

That figure is less than current replacement costs as both buildings were completed about five years ago with condo-level finishes.

They remain rent regulated for another five years through the 421a abatement program, but a few available units are fetching high market rents.

While the local Claret Group developed the buildings in a joint venture, a company spokeswoman said they previously sold their interests back to Post.

The developer revealed the upcoming sale during a conference call last week and Atlanta sources tell us they have hired investment maestro Douglas Harmon of Eastdil Secured to bring them to market.

Last year, Harmon sold the Apthorp for $426 million - setting a record - and the Camargue for $169 million.

Residential rentals have remained a bright spot in the city as people who want to take a breather and wait for home prices to fall more.

A spokesman de clined to comment. Harmon could not be reached for comment.

[kakn7294]

I've only been there once but the location seemed waaaaay too out of the way for the typical tourist. It was the reason I was in that area of NYC. I was also disappointed to find that the "NYC exclusive" stuff that I thought I was purchasing (t-shirts, pins, and fridge magnet) last month was also for sale at WDW last week. Kinda took the shine off it a bit. In fact, as far as the pins went, there was a larger selection of NYC stuff at WDW than at WoD in New York. I do hope it stays somewhere in the city though.