By George Anderson
Some are wondering what took so long but Toys R Us has announced it will begin downsizing when it closes 73 stores this spring.
The owners of the company, including Kohlberg Kravis Roberts & Co., Bain Capital and Vornado Realty Trust, bought the retailer last July and many expected that store closings would begin almost immediately so that the group could begin recouping its investment through real estate sales.
Now, some including Bruce Kaplan, president of Northern Realty Group Ltd., think the owners are less interesting in selling off properties and more interested in making a go of the toy business.
To the decision to close the 73 stores, Mr. Kaplan told the Chicago Tribune, "This doesn't smell like a real estate play. It sounds like they're jettisoning underperforming stores."
"They're slowly upgrading the level of their stores, adding more educational toys and exclusive toys. They're redefining who they are," he said.
George Whalin, president of Retail Management Consultants, agrees. "I think [the investment group] bought it for the long term. Certainly, real estate was an important part of the venture, but I don't think they bought it solely for the real estate," he said.
Moderator's Comment: Is Toys R Us poised for a comeback under its new owners? What will it take for the company to be successful? - George Anderson - Moderator