Toys ‘R’ Us Looking for Some Holiday Magic

Oct 06, 2004

By George Anderson

Toys ‘R’ Us has a plan for being successful during the upcoming holiday selling season, reports the Associated Press.

‘We are looking at making the shopping experience magical, where consumers will find things in the store they don’t expect,’ said John Barbour, president of Toys R Us’ U.S. stores.

The toy retailer, which has seen its once dominant position in the market eroded by Wal-Mart, Target and others, is looking to get its business growing again after years of disappointing performance. Last year, Toys ‘R’ Us’ profits fell more than 60 percent prompting the company to consider selling its toy business and spinning off its successful Babies ‘R’ Us division.

In an attempt to get a leg-up on the competition, Toys ‘R’ Us has negotiated with manufacturers to carry exclusive merchandise such as a fashion mall for Barbie from Mattel.

Plagued by execution problems in the past, Toys ‘R’ Us has gotten an earlier start on bringing in holiday merchandise and stocking shelves. The chain has also remodeled stores to improve the shopping experience.

While Toys ‘R’ Us is clearly looking for points of difference not focused on price, Mr. Barbour said the chain “would not be embarrassed by price.”

Moderator’s Comments: Category killers do well in some categories but have demonstrated weakness in others. Is a category killer format a plus or a minus
in the toy retailing business? What will Toys ‘R’ Us need to do to have a successful holiday selling season?

While the changes at Toys “R” Us sound as if the chain is taking steps in the right direction, the Associated Press article correctly points out,
the chain will need to find further points to differentiate itself from the discounters. This will require, among other things, a total commitment to customer service and, in
our humble opinion, fun.

George Anderson – Moderator

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