Toys aren't them? Toys R Us may sell toy unit

[Ladic]

By Lorrie Grant, USA TODAY

Pounded by competition from discount retailers and increasingly shunned by kids moving on to fancy cell phones and iPods at younger ages, Toys R Us (TOY) says it might shed its toy business in a major restructuring.

The company, eager to maximize its fast-growing Babies R Us unit, announced Wednesday that it is "pursuing the separation" of the baby and toy stores that might include a sale.

"Whatever form the separation takes, these steps should facilitate the execution of a restructured - and substantially leaner and more focused - global toy business that we believe can generate significant cash," Chairman and CEO John Eyler said in a statement. An ongoing board review of the struggling operation has already led to the closing of the Kids R Us and Imaginarium units.

Wayne, N.J.-based Toys R Us is the No. 2 toy seller after discount giant Wal-Mart (WMT). It and other toy chains have faced intense price competition on the most popular toys from Wal-Mart, Target and other discounters. Already, mall-based toy retailer KB Toys and high-end toy merchant FAO Schwarz have been pushed into bankruptcy protection.

Further wounding the industry is kids' ever-earlier attraction to video games and sophisticated consumer electronics.

Separation of Toys R Us' businesses, through a sale of the toy stores or spinoff of the baby unit, makes sense to Art Turock, sales growth strategist at Art Turock & Associates. "It will allow both companies to concentrate on the niches that they serve best. A lot of businesses get into trouble because they go for efficiency and (do) not let the distinctiveness of the two businesses evolve," Turock says.

Babies R Us, the largest baby products specialty-store chain, has 200 U.S. stores. Toys R Us has 683 U.S. toy stores and 579 abroad.

While it considers its options, the company plans immediate steps to cut costs. They include $150 million in markdowns in the second quarter, mainly to liquidate U.S. toy store inventory, and a cut in operating expenses for the corporate headquarters and U.S. toy business by more than $125 million by 2005.

It said no stores will close before the end of the 2004 holidays, but closings are expected.

"We will get some more details about store closings sometime in the next six to eight months, and they will be fairly dramatic, like in the 100 to 150 range," says analyst Sean McGowan, of Harris Nesbitt Gerard.

Toys R Us has been experimenting with ways to increase shopper visits from an average of twice a year. "Some of the things they have started this past year or have in the process are children's haircuts, portrait studios - and Santa will be in (Toys R Us) stores for the first time this holiday season," says Jim Silver, publisher of trade publication The Toy Book.

Can any strategy re-establish the traditional toy retailers vs. the discounters? "It will have to be merchandise of better quality, newer lines and some level of exclusive arrangements and excellent customer service," says Dhruv Grewal, professor of marketing at Babson College.

http://news.yahoo.com/news?tmpl=story&u=/u...smayselltoyunit

[MrDisco]

seeing as FAO has problems its no shock that TrU can't compete either in the face of Wal-Mart. they never have inventory of hot item and their prices can't match up. the Wal-Mart juggernaut claims another victim.

[NERV]

the funny tihng is that walmart and sams club are the same company, and sams club slogan is "we're in business for small business" while walmart's should be "we'r ein business to take out small business" two stores with contradicting purposes

[scand]

I make a trip to the local TRU atleast once a month. Everytime I'm in there the place is dead. Not to mention the prices aren't that great. I do prefer Wal-mart for my toy shopping.

On another note a FAO Shwartz opened up here and didn't last even two years. Really pricey toys there.

[EXO]

don't care... Us Lucky Socal people have Frank and Sons! haha.... The only thing I got at Walmart lately is the 18" Spiderman...

[BoBe-Patt]

yeah, frank and sons is the way to shop with no tax!!!

[Ladic]

I go check Toys R Us every now and then, and saddly their toy collection sucks and the place is always empty.

Back in the 80's I just remember rows and rows of Cool Ji Goes and Transformers TOys and Nintendo games.

[Noriko Takaya]

don't care... Us Lucky Socal people have Frank and Sons! haha....

Hey! We have a Frank & Sons here in Maryland, although it is just a father and son operation in Glen Burnie and he sells toy trains and model kits. Plus, he also has sideburns and hair that puts Elvis Presley's doo to shame.

As for TrU. They are lucky if I even drive by and look at them while I'm up and about during the work day. They're prices have been going up and up year after year. Hell, even K-mart has cheaper toys than most people.

(Hmm, wondering why a 38 year old man (me) is going on about a toy store...)

[Syngyne]

I knew things were bad when the Super Target near me had a better Lego selection than the Toys 'r Us did.

[Opus]

Wal-mart is evil. I absolutely refuse to shop there. I don't even like to drive past it.

[Blaine23]

Wal-Mart may be an evil corporate monolith... but Toys R' Us isn't exactly an old man selling apples from a fruit stand, either.

I get upset when I read about Wal-Mart crippling generations old family business in small towns all over America - I can name several from my region alone. I could care less when they beat out their other international corporate competitors.

Besides, like >EXO<, I haven't bought anything domestic since the 18" Spidey came out. And I got that at Wal-Mart. Because it was cheaper.

[1st Border Red Devil]

Piss on TRU....they wont special order anything anyway. They refuse to cater to their client base and then wonder why everyone goes somewhere else.

[bigkid24]

Yeah, TRU isn't the best but it's still better to have them around even if we don't buy from them. Otherwise Wal-mart really will have waaaaay too much influence over the toy market...even more than they do now.

[Max Jenius]

Yeah, TRU isn't the best but it's still better to have them around even if we don't buy from them. Otherwise Wal-mart really will have waaaaay too much influence over the toy market...even more than they do now.

Well, I mean TRU has crappy prices for the most part. I always went there last in my toy hunts because I knew I'd be paying through the nose, sometimes up to $10-$20 more than the other competitors in Anchorage.

We have some decent Comic/Anime/Gaming shops(primarily because the founder of the place started out sellin comics out of a van in Anchorage and built up... his philosophy is "everything sells, buy everything" and he takes his philosophy to the store. Its been working so far and I always try to go browse when I'm down there.

TRU was cool when it first came to town.. but they can fall off the face of the earth for all I care.

Personally I would like to see a newegg style toy store with a balance between good prices, fast shipping, and massive selection. Ah well.

[MicronianDevil]

Considering that all the complaints of TRU are true, I still find it sad. There goes another piece of my childhood. I loved going to TRU as a kid. Actually I still do. Plus I take my 5-year-old nephew as well and he loves it there. Oh well...life goes on.

[EXO]

Yeah, TRU isn't the best but it's still better to have them around even if we don't buy from them.  Otherwise Wal-mart really will have waaaaay too much influence over the toy market...even more than they do now.

Well, I mean TRU has crappy prices for the most part. I always went there last in my toy hunts because I knew I'd be paying through the nose, sometimes up to $10-$20 more than the other competitors in Anchorage.

We have some decent Comic/Anime/Gaming shops(primarily because the founder of the place started out sellin comics out of a van in Anchorage and built up... his philosophy is "everything sells, buy everything" and he takes his philosophy to the store. Its been working so far and I always try to go browse when I'm down there.

TRU was cool when it first came to town.. but they can fall off the face of the earth for all I care.

Personally I would like to see a newegg style toy store with a balance between good prices, fast shipping, and massive selection. Ah well.

That's almost the motto I had when I was in business for myself.

Good, Fast and Cheap... pick two...

[Solscud007]

But hey I didnt see Alternators at F&S plus youhave to deal with jackass people jacking up prices for no good reason.

[JsARCLIGHT]

When I was a kid there were two big toy giants, Toy Chest and Children's Palace... both of which were sort of the pre-TRU FAO stores of the late '70s early '80s. Toy chest went tits up from competition with Children's Palace... Children's Palace went tits up in the late eighties from competition with TRU... now TRU is getting killed by Walmart of all things.

I remember those halcyon days of yore, riding my BMX bike a mile or more into town to the Children's Palace and spending my weekly allowance on wiffle ball bats, frizbees, those damn nerf boomerangs and other such swag. When CP went cold in the late eighties I had a friend I knew from high school go there and buy all the Sega Genesis carts he could for me and mail them to me in Germany. I scored big that day. I was the hit of the base for about ten minutes.

[bsu legato]

Any toy store that charges $40 Cdn for a Transformers reissue doesn't get my business. Sorry, TRU. You lose.

[phoenix01]

don't care... Us Lucky Socal people have Frank and Sons! haha....

Hey! We have a Frank & Sons here in Maryland, although it is just a father and son operation in Glen Burnie and he sells toy trains and model kits. Plus, he also has sideburns and hair that puts Elvis Presley's doo to shame.

As for TrU. They are lucky if I even drive by and look at them while I'm up and about during the work day. They're prices have been going up and up year after year. Hell, even K-mart has cheaper toys than most people.

(Hmm, wondering why a 38 year old man (me) is going on about a toy store...)

Where?!?!?!?!?

[Bariaburu Faita]

Why cant US TRU do like Japan TRU and get popular toys at low prices? It my hands down favorite place to get Yamato Valks. Best prices in all Japan. And they tend to have alot of model kits that sell out at other specialty stores.

[Gaijin]

I remember those halcyon days of yore, riding my BMX bike a mile or more into town to the Children's Palace and spending my weekly allowance on wiffle ball bats, frizbees, those damn nerf boomerangs and other such swag.

...boom boom boom Nerf Boomerang.... couldn't resist.

[HWR MKII]

heres a question? whens the last time you actually saw a kid on a big wheel or outside playing with a toy dumptruck? now go to TRU and see if there is even a high quality model you have to paint anymore. and when was the last time you saw a VF1 airframe in any common stateside TRU location.kids have changed from when we were all 10 and they have no interest like we do for putting time in on something like a model or going OUTSIDE with their friends to do something that doesnt require spraypaint. TRU is going under because they couldnt change and when they tried it was too late. they lost the good stock of items we used to like and the prices went up.

sean