kfcboston
11-18-2003, 09:38 AM
Toys `R' Us pulls plug on two subsidiaries
By Greg Gatlin
Tuesday, November 18, 2003
Toys ``R'' Us Inc. said yesterday that it will close its Kids ``R'' Us clothing stores and its Imaginarium chain, including six Bay State stores, following deteriorating results at those chains.
Wayne, N.J.-based Toys ``R'' Us said the closing of 146 freestanding Kids ``R'' Us stores and 36 Imaginarium stores, which sell educational toys and games, will result in 3,800 jobs lost.
Locally, Kids ``R'' Us stores will close by Jan. 31 in Framingham, Peabody, Woburn, North Attleboro and Holyoke. An Imaginarium store will close in Brookline.
John Eyler, chief executive of Toys ``R'' Us, said efforts to reverse a worsening performance at the Kids ``R'' Us and Imaginarium chains were unsuccessful, and the deterioration accelerated. The company said it will pursue clothing and educational toy sales through Toys ``R'' Us stores.
The move comes as toy retailers are feeling the competitive pinch from Wal-Mart and other discounters. Toys ``R'' Us reported a wider than expected third-quarter loss yesterday and cut its annual profit forecast.
FAO Inc., parent of the FAO Schwarz, Zany Brainy and Right Start chains, said last week that it defaulted on lending terms and is trying to survive the holiday shopping season.
Credit-rating agency Standard & Poor's revised its outlook on Toys ``R'' Us to ``negative'' from ``stable,'' citing continued deterioration of the chain's U.S. toy division.
In 2002, Kids ``R'' Us accounted for about 9 percent of the company's stores and less than 5 percent of its sales.
``Although there are signs that the overall economy is improving, we have not seen an improvement in consumer confidence or much improvement in employment, and we are not seeing the kind of spending you would associate with a recovery,'' Eyler said.
By Greg Gatlin
Tuesday, November 18, 2003
Toys ``R'' Us Inc. said yesterday that it will close its Kids ``R'' Us clothing stores and its Imaginarium chain, including six Bay State stores, following deteriorating results at those chains.
Wayne, N.J.-based Toys ``R'' Us said the closing of 146 freestanding Kids ``R'' Us stores and 36 Imaginarium stores, which sell educational toys and games, will result in 3,800 jobs lost.
Locally, Kids ``R'' Us stores will close by Jan. 31 in Framingham, Peabody, Woburn, North Attleboro and Holyoke. An Imaginarium store will close in Brookline.
John Eyler, chief executive of Toys ``R'' Us, said efforts to reverse a worsening performance at the Kids ``R'' Us and Imaginarium chains were unsuccessful, and the deterioration accelerated. The company said it will pursue clothing and educational toy sales through Toys ``R'' Us stores.
The move comes as toy retailers are feeling the competitive pinch from Wal-Mart and other discounters. Toys ``R'' Us reported a wider than expected third-quarter loss yesterday and cut its annual profit forecast.
FAO Inc., parent of the FAO Schwarz, Zany Brainy and Right Start chains, said last week that it defaulted on lending terms and is trying to survive the holiday shopping season.
Credit-rating agency Standard & Poor's revised its outlook on Toys ``R'' Us to ``negative'' from ``stable,'' citing continued deterioration of the chain's U.S. toy division.
In 2002, Kids ``R'' Us accounted for about 9 percent of the company's stores and less than 5 percent of its sales.
``Although there are signs that the overall economy is improving, we have not seen an improvement in consumer confidence or much improvement in employment, and we are not seeing the kind of spending you would associate with a recovery,'' Eyler said.