Toys "R" Us finds itself looking for a new chief executive following the announcement that current CEO Gerald Storch is stepping down from that position. Mr. Storch will remain as chairman of the board.
The decision described as "mutual" in reports follows on the heels of a disappointing fourth quarter for the toy chain. Same-store sales for the chain fell nearly two percent in December and 3.5 percent overseas.
"I am incredibly proud of what we have accomplished together over the past seven years," said Mr. Storch in a statement. "The Toys 'R' Us brand is stronger than ever due to the hard work and dedication of our talented team around the world. Looking to the future, we will always 'Play to Win'.'
The Toys "R" Us board praised Mr. Storch for "his efforts to develop best-in-class e-commerce and omnichannel capabilities and in significantly expanding the development of proprietary and differentiated products."
While Mr. Storch has been credited with helping the company achieve solid results since taking over as CEO in 2006, some believe the combination of tough competitors such as Target and Walmart and huge debt levels are perhaps too much to overcome.
"Clearly the company's in a better position, by almost any metric," Sean McGowan, an analyst with Needham & Co., told The Record.
Toys "R" Us has "picked up share, improved margins, made the stores look better than ever," Mr. McGowan said, "but it just underscores that doing all that isn't enough in a low-growth or perhaps declining business, where you have competitors that don't need to be profitable in this category. It just goes to show you how tough it is."