Disney Consumer Products Poised for Incremental Retail Sales Growth with New Disney Baby Store & Rich Franchise Investment

Disney is poised to continue expanding its presence on retail shelves with a wide variety of franchises and new entertainment support to keep them as popular as ever. During a media presentation today in preparation for the annual Licensing International Expo 2011 trade show next week, Andy Mooney, chairman of Disney Consumer Products, said that sales of Disney-branded merchandise have grown at a compounded rate of 12 percent per annum over the last 10 years. Mooney also outlined the division’s strategies to continue broadening its market reach and increase global sales, including: a Disney Baby retail store strategy; the growth of mega franchises such as Disney•Pixar Cars; and the incredible lasting power of Mickey Mouse — the world’s largest on track to generate $9 billion in global retail sales.

Ranked as the third most recognized brand in the world*, Disney is the only entertainment company with both brand and franchise equity enabling it to compete in a very broad market. Mooney explains Disney’s franchise strategy, “Our primary objective in franchise development has been to diversify our portfolio to connect with a broader range of consumers. We’ve not only grown the number of Disney franchises from only two in the year 2000 to 13 in 2011, but classic franchises have not suffered because of it. This is evidenced by global retail sales of Mickey Mouse and Friends merchandise on track to generate $9 billion and the incremental retail space devoted to Cars 2 in addition to the already substantial Cars line.”

New content and merchandising programs for evergreen classics such as Disney Princess and Winnie the Pooh, new original programming from Disney Channel and the new Disney Junior brand and upcoming preschool channel, as well as plans for ongoing content for Disney Fairies and Toy Story are set to propel sales of Disney-branded merchandise and growth for Disney franchises.

DISNEY BABY

Disney is taking its participation in the newborn and infant segment to a new level by bringing the resources of the Company to support this opportunity. Since connecting with new families is probably more valuable to Disney than to any other brand, Disney is making investments to build Disney Baby as a brand and a business, including creating a two-way dialogue with new moms through digital platforms development, social media, product seeding and a loyalty program. Additionally, Disney will expand the business into retail when it opens the first Disney Baby concept store in fall 2012 in the Los Angeles area at The Americana at Brand in Glendale, CA.

DISNEY•PIXAR CARS & TOY STORY

In less than five years since the original Disney•Pixar film release, merchandise for the Cars franchise has generated global retail sales of more than $10 billion including sales from the 2010 holiday retail season – with sales sustained at high levels every year since theatrical release and making it among Disney’s top franchises. Retail merchandise for Cars 2 began to roll out globally in mid-May and is already on track to meet retail projections that will exceed Toy Story 3’s sales last year, positioning it to become the largest merchandise program in licensing industry history.

DCP will continue to support the Cars franchise in 2012 and beyond with a wide assortment of products for kids, adults and collectors. Across the Company, Cars will benefit from a robust program delivering sustained reach and frequency, including: new Cars Toons short-form content that will be shown in movie theaters as a preview to animated films, featured as a bonus on Disney DVDs, offered in high rotation on Disney Channel and Disney XD as well as through other digital platforms. And that’s not all. In summer 2012 Disney Parks & Resorts will open 12 acres of Cars Land, featuring three new immersive attractions at Disney California Adventure. Cars Land will be the focal point in a major marketing campaign to promote California Adventure.

Disney•Pixar’s Toy Story franchise has been tremendously successful and was recognized as “Property of the Year” by the Toy Industry Association in 2010. To continue the momentum, Disney•Pixar will produce on-going short-form content in support of the franchise keeping it top of mind and generating momentum for new product lines. The first Toy Story Toon, “Hawaiian Vacation,” will debut this summer in movie theaters as a preview to Cars 2 and will then be seen on Disney Channel and Disney Online, plus it will be included in the Cars 2 DVD this fall. Disney•Pixar will produce two additional Toy Story Toons in 2012 with plans for future production.

MICKEY MOUSE & WINNIE THE POOH

As Walt Disney himself said, “We should never forget that it all started with a Mouse.” Binding generations together more than any other character, Mickey Mouse continues his reign as Disney’s most popular character and remains the most valuable franchise in the world by a substantial margin. In fact, Mickey and his circle of friends are on track to generate $9 billion in global retail sales in fiscal year 2011. In addition to the popular Disney Junior series Mickey Mouse Clubhouse, the short-form series “Have a Laugh” and “Re-Micks” – fully restored and digitally remastered versions of classic cartoons created by Walt Disney – are presented daily on Disney Channel.

As DCP’s second largest franchise with massive global appeal, Winnie the Pooh will return to the big screen in the United States next month. DCP has already seen a positive lift in product sales from the theatrical release in Europe earlier this year and anticipates solid sales in the fall during the DVD’s release. Already a hit in the digital and social media realm, the Winnie The Pooh: What’s A Bear To Do? Puzzle Book app instantly topped the sales charts for iPad and iPhone in 12 countries. This continued exposure and the investments with Disney Baby will be key drivers for growth of the franchise going forward.

DISNEY PRINCESS & DISNEY FAIRIES

Disney Princess has benefited from back-to-back theatrical releases featuring new princess characters, The Princess And The Frog and Tangled, though it should be noted that sales of Disney Princess merchandise have grown for a decade independent of content. To continue driving incremental growth of this multibillion-dollar franchise, Disney has a rich slate of content and events designed to keep Disney Princess top of mind with families and young girls.

It all starts this fall when Rapunzel will be officially welcomed into the Disney Princess Royal Court in a special global celebration that will reach millions of girls around the world. In spring 2012, girls will finally see Rapunzel marry her true love Flynn Rider in a short-form Disney animation special set to air on Disney Channel. Walt Disney Studios announced today that they will release the beloved animated classic Beauty and the Beast for the first time in mesmerizing Disney Blu-ray 3Dâ„¢ for in-home viewing. Additionally two special edition releases of Beauty and the Beast: Belle’s Magical World and Beauty and the Beast: The Enchanted Christmas will release on November 22. For more information, please visit www.disney.com/BeautyAndTheBeast3D.

In fall 2012, Disney Junior will premiere Sofia the First, a new full-length animated special and series pilot set in the storybook world of the classic Disney Princess characters. It introduces Sofia, a little girl with a commoner’s background until her mom marries the King and suddenly she is royalty. With the help of the three familiar fairies in charge of the Royal Training Academy – Flora, Fauna and Merryweather of Disney’s classic “Sleeping Beauty” and, on occasion, classic Disney Princess characters including Cinderella, Sleeping Beauty and Snow White – Sofia learns that looking like a princess isn’t all that hard but behaving like one must come from the heart.

Launched just five years ago to expand consumers’ affinity for Tinker Bell, Disney Fairies is now among Disney’s top franchises generating robust retail sales around the world. Disney Fairies encourages six-to-nine year old girls to explore and discover exciting new worlds across multiple platforms including: three Disney Fairies direct-to-video films reaching 30 million viewers each; dedicated air time on Disney Channel for the Disney Fairies films reaching an incremental 21 million viewers per quarter; Pixie Previews short-form content on Disney Channel which airs an average of 700 times per year; the DisneyFairies.com website and the virtual world of Pixie Hollow which together are visited by 20 million girls each year. And beginning next month, avid readers and fans will enjoy new stories via Disney Fairies digi-comics, plus a new Disney Channel special releasing this fall, Disney’s Tinker Bell and the Pixie Hollow Games. Moving into 2012, Disney Fairies will debut unified branding across the company.

TV LICENSING

Disney Junior

Disney is taking its participation in the preschool segment to an entirely new level in 2012 with the launch of a 24-hour channel dedicated to programming for kids 2 – 7, Disney Junior. Disney Channel already showcases approximately 60 hours of preschool programming each week in the Disney Junior block in nearly 100 million homes. The new Disney Junior network will air an additional 108 hours of programming per week. Franchises that will immediately benefit from the launch of Disney Junior include the already successful Mickey Mouse Clubhouse; the series has been so successful, in fact, that a new Minnie series for 2012 and short-form content premiering in fall 2011 is in development. Sales of Minnie Mouse merchandise are also performing well. The increased reach and frequency of Disney Junior is allowing DCP to build momentum more quickly and maximize merchandising opportunities with new series such as Jake and the Never Land Pirates set for retail release in 2012.

Disney Channel

DCP will continue to support popular Disney Channel characters Phineas and Ferb with year-round sales opportunities, category expansion, age and gender demographic expansion, and new creative spotlighting their sidekick Agent P (aka Perry the Platypus). The next generation of Disney Channel talent is impressive and new series like Shake It Up, A.N.T. Farm and the pilot for Madison High will provide tween girls stories and characters they can relate to and inspire them to dream big. DCP will continue to bring their dreams to life with products that foster their talents and encourage them to explore their ambitions. The first Shake It Up merchandising program will launch this back-to-school and holiday season, including two fall collections from the popular D-Signed fashion line exclusive to Target; a shoe collection at Payless; and a line of Shake It Up-branded merchandise at K-Mart. Mattel will also launch a line of Shake It Up dolls inspired by lead characters CeCe and Rocky as part of its new Disney VIP Doll collection in time for the holidays.

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