Consumer Products

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Disney Consumer Products is gaining ground through an array of new initiatives for merchandise licensing and the Disney Store, as well as its Interactive and Publishing units.

Licensing A key strategy for merchandise licensing this year has been the realignment of operations into three distinct businesses: toys, apparel and "hardlines," which includes such diverse items as home furnishings, personal care and stationery. This new approach enables Disney Consumer Products to develop distinct strategies for each line of business. In the hardlines category, this new approach has led to innovative licensing initiatives such as The Disney Home Collection, which features home furnishings and the 166-color paint palette of Disney Color. The Disney Home Collection can be found in more than 2,000 Wal-Mart stores nationwide, and is expected to reach more than 8,000 home improvement retailers by mid-2001.

Barton K. Boyd Chairman, Disney Consumer Products Worldwide

Disney Consumer Products also has refined its strategies for leveraging Disney's unparalleled brand strength by continuing to enhance the value of Disney's beloved characters while at the same time diversifying the portfolio of licensed products to include an appealing array of non-character items. For example, Disney Consumer Products has developed entirely new apparel lines based on highly popular Princess icons from the Disney film library. It also is extending the Disney brand into the non-character segment of the children's apparel market, enabling parents to create stylish outfits for their children by mixing and matching character and non-character clothing. Parents also will be able to choose items from brand-new thematic clothing collections such as it's a small world, which adapts the original art of Mary Blair, designer of the beloved small world attraction.

Disney Consumer Products also is bringing renewed excitement to its global apparel line in 2001. In Europe, licensee and retailer Donaldson is expanding its successful line of high-end Disney-branded clothing. This exclusive collection has grown in popularity and brings favorite Disney characters to clothing of the highest quality for adults and children.

Disney Consumer Products' new strategy for toy licensing is highlighted by the September announcement of agreements with Hasbro, Inc., and Mattel, Inc., that leverage the global scale and respective strengths of these toy industry leaders. Under terms of the newly restructured licensing agreement with Mattel, its Fisher-Price subsidiary will produce toys based on classic Disney characters such as Mickey Mouse, Winnie the Pooh and the Disney Princesses, as well as any new infant and preschool toys based on film and television properties created by Disney. Hasbro will develop and market toys and games associated with upcoming Disney-branded film properties, beginning with Monsters, Inc., a Disney/Pixar animated feature film scheduled for release in fall 2001. In addition, the holiday 2000 release of 102 Dalmatians brings a new level of technological wizardry to toys, with the introduction of a Dalmatian "Poo-Chi" from Tiger Electronics. And there is no better character than Mickey Mouse to assist in the cognitive development of infants than a new range of Mickey developmental toys from Mattel, which stimulate coordination and motor skills.

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