AP News

Toys R Us revamps some stores ahead of holidays

NEW YORK (AP) — It may only be September, but sleigh bells are already ringing for toy makers and sellers.

Toys R Us plans to revamp some of its stores with dedicated "store-within-a-store" areas for hot items like tablets and construction toys. It's also offering incentives like cash-back programs to entice customers into stores earlier and capture more holiday dollars.

The Thanksgiving-to-Christmas season is crucial, since it accounts for up to 40 percent of retailers' annual sales. But so far this year, sales are lackluster industrywide and Toys R Us itself is facing tough competition from discount stores and online retailers. The toy store also is in the midst of a CEO search, since Jerry Storch left the position in February.

"From a traditional toy standpoint the industry has been weak, so they're trying to bolster non-toy merchandise like tablets," said BMO Capital Markets analyst Gerrick Johnson. He estimates total toy revenue will be down 2 percent to about $21 billion in the U.S. "It's going to be another challenging holiday season."

Despite the tough outlook, however, Chief Merchandising Officer Richard Berry said it is "business as usual" at Toys R Us and that the company is "extremely focused on the holiday season."

The "store-within-a-store" design is one of the biggest changes that the privately held Wayne, N.J.-based retailer is making. About 300 stores will have areas for key categories such as tablets, education, party supplies and construction toys.

The company is expanding its assortment of tablets in all stores to 25 from just a handful last year, including its own Tabeo2 tablet, which has 8-inch screen, an inch larger than last year, and a faster processor. In the construction area it will have 400 Lego sets, including 71 exclusive sets. The company has pared down in other areas like diapers and video games to make room for the store-within-a-store format.

In addition, Toys R Us is offering some promotions to encourage customers to get shopping done earlier this year. It's offering its loyalty program members 10 percent back, up to $100, on purchases made by Oct. 31. It's also offering free layaway until Dec. 15 and a price-match guarantee to match pricing in local stores and some online merchants.

Toys R Us also is offering exclusive products only found at its stores to lure more shoppers. Some examples of exclusives this year include two Monster High dolls, Scarah Screams, a fashion-obsessed ghoul, and Headless Headmistress Bloodgood, a doll with a removable head and bedazzled horse.

Other exclusives include Shimmer N' Sparkle Cra-Z-Loom, which makes rubber bracelets, and Crazy Cart, a kid-size go-cart from Razor.

The Good Business Issue
blog comments powered by Disqus