Over the past year, Toys 'R' Us has experimented with a store that combines its successful Babies 'R' Us formula with elements of its struggling toy store business under a single roof. The pilot project, which began with conversions of smaller Toys 'R' Us locations, is now being expanded.
"Mom is time-starved and this gives her the ability to buy everything she needs for her children at one stop," said Jerry Storch, chairman and chief executive of Toys 'R' Us, told The Associated Press.
Mr. Storch said the decision to expand the combination format was made after pilot locations generated double-digit sales increases.
"We have plenty of evidence that this is successful," Mr.Storch said.
Toys 'R' Us plans to open its first two combination superstores in Elizabeth, New Jersey and Redlands, California today with more to open next fall in Arizona and Florida. Three of the locations are being built from the ground up while the store in NJ is converted from an existing Toys 'R' Us.
"This is a major, major shift in this company's direction from a position of relative retreat...into a position of growth, into an aggressive mode," Mr. Storch said.
Chris Byrne, an independent toy consultant, said the new format is reminiscent of Toys 'R' Us' past. "You had to pass all the toys with your child in the cart to get to the cheapest diapers in town," he told The Record. Mr. Byrne sees opportunity with the new format. "You've got to get people to the store,' he said. "Driving traffic is really key for retail right now."
Another toy consultant, Richard Gottlieb, also sees the logic in the combo format. "Babies are born every day, so there is not the seasonality in the baby business that there is in the toy business," he told The Record. "And most of these parents who have babies, and many of the grandparents, have older children or grandchildren as well. So while they're at Babies "R" Us they continue on to Toys "R" Us and shop there."
Discussion Question: What do you see as the opportunities and challenges associated with the Toys 'R' Us new combo format?