DISNEY TO REVAMP RETAIL OUTLETS.

Byline: Dave McNary Staff Writer

The Walt Disney Co. has begun work on a major face lift for its 12-year-old Disney Stores chain, hoping to boost lagging sales.

A Disney executive told the Daily News on Tuesday that the revamp of many of the 700-plus stores would probably not take place until next year but added that some test designs will be rolled out in the coming months.

``We're definitely going down the path of looking at some ways to redesign elements to be more relevant and timely,'' said Sondra Haley, an executive with the chain. ``But it won't happen overnight.''

The design changes will be aimed mostly at the mall-based stores rather than at flagship locations in urban shopping districts such as Fifth Avenue in New York, North Michigan Avenue in Chicago and Post Street in San Francisco. Disney operates 496 stores domestically and another 222 in 10 countries with at least a dozen more stores expected to open by the end of the year.

Haley stressed the chain will also be exploring ways to update its merchandise mix, noting that European outlets have been posting improved results in the wake of similar moves.

``We're going to be taking a page out of their playbook,'' she said.

The chain recently tapped a Disney World retail veteran, Laurie Beja Miller, to address questions of how to stock the stores. Miller was named senior vice president and general merchandise manager for North American operations.

The Disney Stores, which began in 1987 with a single store at the Glendale Galleria, had been a key component in the decadelong growth of Disney and its shares.

The stores tap into the seemingly insatiable appetite consumers have for an array of clothing, collectibles and other gifts featuring Mickey Mouse, Winnie the Pooh and other animated characters. But sales slowed in 1998 as the Beanie Baby frenzy began to cool and Disney admitted last week that quarterly revenues at stores open at least a year were off 10 percent.