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Toys ‘r’ Us Pinning Hopes on New Superstores

Tag:china toys,pinning hopes,new superstores
From:http://www.buy-china-toys.com/

  Selling toys to kids is no child’s play. Toys “R” Us, a $13.79 billion company based in Wayne, N.J., is trying to run with the market leader — Wal-Mart — by building toy “supercenters” around the country.
  The grand opening of the first toy superstore in Georgia is Friday.
  The store is filled not just with toys, but the latest hopes of a retailer that has seen competitors like FAO Schwartz file for bankruptcy. And Toys “R” Us has faced losing market share to Wal-Mart and Target’s low prices.
  Called “R” stores for short by the company, Toys “R” Us is putting cribs, strollers, diapers and onesies under one roof with Hannah Montana electric guitars, Harley Davidson-branded Big Wheels and Ripsticks, a two-wheeled skate board.
  The supersized, 70,000 square foot toy store here is anchoring a new strip mall, The Plaza, at 3480 Financial Way in Buford, a suburb near Lake Lanier. It’s the seventh “super” toy outpost nationwide for the 60-year-old retailer. Toys “R” Us CEO Gerald Storch says 19 more are planned this year.
  In Georgia, there are 17 Toys “R” Us, nine Babies “R” Us stores, one side-by-side store and one supercenter.
  “Eleven years ago, we started Babies ‘R’ Us as a standalone (store),” said Storch. “But we fractured the traffic so parents would have to choose between them. In this era, people don’t want to go to multiple places.”
  Toys “R” Us also has upgraded its aisles and inventory to look more like Target, known for fashionable gear and trendy looks at a cheaper price.
  “The stores were not in fighting shape when I got here,” said Storch, the former No. 2 executive at Target who’s headed Toys ‘R’ Us since 2006.
  Toys “R” Us is owned by KKR, Bain Capital, and real estate firm Vornado Realty Trust. They took the toy chain private in a $6.6 billion deal in 2005.
  Storch says Toys “R” Us is not a discount brand like Target, and the changes reflect the desire to be “the authority” on everything from baby bottles to toys. He emphasized he is not copying Target, but doing things that make sense for selling toys — like branding aisles pink for girls or blue for boys, and including pictures on the signs so kids can read them too.
  Three toy industry watchers said it makes sense for Toys “R” Us to team up Babies “R” Us because the baby business is year-round, while toys are seasonal, peaking over the holidays.
  “Babies ‘R’ Us is successful and not seasonal,” said Sean McGowan, an analyst with Needham & Co. in New York. “That’s probably the biggest ‘Aha.’ “
  He said this toy story is really turning around. “This was a broken story,” he said. “It looked like the chain couldn’t survive Wal-Mart and was on its death march. But they didn’t separate [Toys ‘R’ Us and Babies ‘R’ Us], they hired some world-class executives and it started to dawn on everybody that they are really going to turn around.”
  Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment banking firm in New York, said that Toys “” Us “has gone through a lot of pain.”
  About 15 years ago, when he consulted for the company, Toys “R” Us led the American toy market with a 28 percent market share, he said. Today, their market share has dropped to 16 percent, with Wal-Mart at 26 percent. Target is third.
  “And the toy department in Wal-Mart is only 5,000 square feet, but they have a lot of stores,” said Davidowitz. By combining the babies and toy stores, Toys ‘R’ Us is trying to create a destination, he said, which is “logical.”
  Jim Silver, editor and chief of Toys and Family Entertainment in New York, said the new concept makes sense.
  Said Silver: “People are creatures that often don’t change. This will be a one-stop shop from the time a child is born.”
  That was true for Amy Rundell of Duluth, who was shopping at the new store in Buford on Wednesday. She has a 19-month-old daughter, Molly, a 7-year-old son, Max, and is expecting another baby.
  She was happy she won’t have to drive out of her way anymore to go to a Babies “R” Us store. “This is great. One stop,” she said, hauling the loot that the kids’ grandmother and great-grandmother had just bought for them, including blocks, coloring books, school supplies and baby food.
  Storch said that’s the point.
  “We think we can do even better with Toys ‘R’ Us and Babies ‘R’ Us by merging their strengths,” he said.
  The company still plans to build more Babies “R” Us standalone stores. But going forward, the strategy will also include more superstores, or Babies “R” Us areas within the smaller Toys “R” Us footprints. One of those is in the works for Savannah. Storch said the company’s goal is to open about two dozen converted stores and 20 new superstores per year.

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