BUSINESSWEEK ONLINE : DECEMBER 4, 2000 ISSUE
COVER STORY

52 Years of Toys 'R' Us


Started in a bike shop, Toys 'R' Us went on to define big-box toy retailing. Then came Wal-Mart.

1948
Returning from a stint in the Army, 25-year-old Charles Lazarus feels too old to start college. So he starts selling baby furniture in his father's Washington (D.C.) bike shop with $5,000. His idea is to supply families of G.I.'s returning from the war.

1952
Mr. Potato Head becomes the first toy to be nationally advertised on TV. This sparks a multibillion- dollar system of selling toys. Lazarus starts opening toy supermarkets, creating one of the first big-box retailers. Modeled on supermarkets, it has customers pulling goods from shelves and packing them in their own bags and boxes.

1957
The store is renamed Toys 'R' Us. Two years later, Barbie is born, destined to become the best-selling doll ever.

1966
Lazarus sells his four stores to Interstate Stores for $7.5 million and continues to run the toy operation.

1974
Interstate Stores, beset with problems in its discount stores, files for bankruptcy. It focuses on toys and appoints Lazarus CEO. Four years later, the company reemerges as Toys 'R' Us.

1983
The video-game craze, launched by Atari, peaks. A year later, Toys 'R' Us opens its first overseas stores. By 2000, there are 477 stores accounting for 27% of sales.

1990
Toys 'R' Us sales hit $4.8 billion, up from $480 million in 1980. They get a boost from another hot product: Nintendo's handheld Game Boy.

1994
Lazarus, 71, retires as CEO but remains chairman. A lucrative consulting package pays him $8 million in 1995 and more later. Michael Goldstein, an accountant by training, becomes CEO.

1996
Toby Lenk launches an online competitor, eToys.

1998
Wal-mart passes Toys 'R' Us as largest U.S. toy retailer. Goldstein steps down. Toys 'R' Us loses $132 million.

1999
Market turmoil is reflected in executive suite. Goldstein's replacement, Robert Nakasone, leaves after only 18 months. Most retailers have a good Christmas, but Toys 'R' Us struggles to stock store shelves and deliver goods through its toysrus.com Web site.

2000
John Eyler takes over as CEO, emphasizing proprietary toys and improved customer service. Toysrus.com and Amazon.com combine toy sites.



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