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Disney Shuts ESPN Stores, Touts Web

For some network-related companies, the recent trend toward
building bricks-and-mortar retail stores to sell spinoff merchandise is being supplanted
by cyberspace stores.

Even as ESPN talked up its upcoming 20th
anniversary last week, parent The Walt Disney Co. said it would shutter its three ESPN-The
Store retail sites in Southern California by Oct. 1.

The Disney Store Inc. has operated those stores for about
two years at Glendale Galleria, MainPlace/Santa Ana and the Del Amo Fashion Center in

Instead, Disney said in a press release that it "would
redirect marketing and sales efforts for its ESPN-branded merchandise [by] focusing on its
ESPN Zone sports-themed dining and entertainment complexes, electronic-commerce
initiatives through" and licensed merchandise sales through non-Disney

Tom Park, executive vice president of The Disney Store
Worldwide, said in a prepared statement that the company will step up its marketing
efforts in those areas. "We have determined that the best strategy for us is to
leverage the merchandising success that ESPN Zone,
and our licensing program have already achieved," he said.

The latest ESPN Zone is a 42,000-square-foot complex
scheduled to open in New York's Times Square Sept. 14. Two more are scheduled for
2000 in Atlanta and Washington, D.C. The first ESPN Zone opened in Baltimore last year,
followed by one in Chicago during the CTAM Summit there in July.

As for, Disney said the e-commerce Web site
would "grow tenfold" during September to carry more than 15,000 items --
including new ones in the fitness, golf and footwear categories.

In an apparent reference to the costs of operating a retail
store, ESPN said its Web-site store stays open around the clock.

ESPN isn't the first programmer that found it
difficult to adapt The Disney Store's winning retail formula. Viacom Inc. announced
in December that it was shuttering its lavish Viacom Entertainment Store in Chicago and
phasing out its 15 Nickelodeon stores.

Nick continues to have a retail presence, via Blue's
sections in Sears, Roebuck and Co. stores, for example.

On the other hand, Discovery Communications Inc. continues
to expand its retail presence nationally.

About 40 ESPN store employees will be affected, with an
unspecified number of those due to be transferred to Disney Store operations or elsewhere
within Disney, the company said.

A company spokeswoman said it was unlikely that ESPN would
place ESPN-themed departments or boutiques within Disney Stores or non-Disney retail
chains, along the lines of what VH1 and The Nashville Network are doing. The company
evaluated many other ideas before finalizing those that it announced last week, she added.

VH1 currently has a licensed department within Macy's
Manhattan flagship store, while TNN said late last month that it would open licensed
specialty shops inside six Wal-Mart Stores Inc. Wal-Mart SuperCenters by year's end,
in association with Zzoom Enterprises L.L.C.