COMPANY PROFILE
Toys “R” Us, Inc.
REFERENCE CODE: E07857C1-BCAF-48B6-8716-34C0569D04B8
PUBLICATION DATE: 21 Feb 2014
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Toys “R” Us, Inc.
TABLE OF CONTENTS
TABLE OF CONTENTS
Company Overview..............................................................................................3
Key Facts...............................................................................................................3
Business Description...........................................................................................4
History...................................................................................................................5
Key Employees.....................................................................................................9
Key Employee Biographies................................................................................10
Major Products and Services............................................................................16
Revenue Analysis...............................................................................................17
SWOT Analysis...................................................................................................19
Top Competitors.................................................................................................26
Company View.....................................................................................................27
Locations and Subsidiaries...............................................................................30
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Toys “R” Us, Inc.
Company Overview
COMPANY OVERVIEW
Toys “R” Us, Inc. (TRU or ‘the company’) is a specialty retailer of toys and baby products. The
company has presence across various countries in North America, Europe and Asia. It is
headquartered in Wayne, New Jersey and employed about 68,000 people as of February 2, 2013.
The company recorded revenues of $13,543 million in the financial year ended January 2013
(FY2013), a decrease of 2.6% compared to FY2012. The operating profit of the company was $556
million in FY2013, a decrease of 4.5% compared to FY2012.The net profit was $38 million in FY2013,
a decrease of 74.5% compared to FY2012.
The company’s financial year ends on the Saturday closest to January 31. FY2013 was a 53-week
period and FY2012 was a 52-week period.
KEY FACTS
Head Office
Toys “R” Us, Inc.
One Geoffrey Way
Wayne
New Jersey 07470 2030
USA
Phone
1 973 617 3500
Fax
Web Address
http://www.toysrus.com/
Revenue / turnover 13,543.0
(USD Mn)
Financial Year End
January
Employees
68,000
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Toys “R” Us, Inc.
Business Description
BUSINESS DESCRIPTION
TRU is privately held retailer of toys and juvenile products. The company sells a variety of products
in the core toy, entertainment, juvenile, learning and seasonal categories through its retail locations
and the internet in North America, Europe and Asia. In FY2013, the company operated 1,540 stores
and licensed 163 stores across 36 countries around the world. TRU also operates Toys "R" Us
Express stores, smaller format stores which are open on a short-term basis during the holiday
season.
The company operates through two business segments: Toys "R" Us-domestic and Toys "R"
Us-international. These segments operate various store formats, including traditional toy stores,
juvenile stores, side-by-side (SBS) stores, permanent Express stores, and flagship stores. Through
these store formats, the company offers items across the following five product categories: core toy,
entertainment, juvenile, learning, and seasonal.
The Toys "R" Us-domestic segment operated 875 stores in 49 states in the US and Puerto Rico at
the end of FY2013. These stores comprise 393 traditional toy stores (including 83 BRU Express and
Juvenile Expansion formats), 239 juvenile stores, 204 SBS stores, 36 permanent Express stores
and three flagship stores in New York City. On an average, the company's stores in the US offer
approximately 12,000 items throughout the year. The company operates 10 distribution centers in
the US, which support its domestic retail stores.
The Toys "R" Us-international segment operated through 665 owned and 163 licensed stores in 35
countries in FY2013. The owned stores included 459 traditional toy stores (including 17 BRU Express
formats), 170 SBS stores, 23 permanent Express stores and 13 juvenile stores. On an average, a
typical international store carries a range of 8,000 items. These stores are located in Australia,
Austria, Brunei, Canada, China, France, Germany, Hong Kong, Japan, Malaysia, Poland, Portugal,
Singapore, Spain, Switzerland, Taiwan, Thailand and the UK. TRU operates 10 distribution centers
outside the US that supports its international stores.
The company's traditional toy stores range in size from 20,000 to 50,000 square feet and allocate
approximately 6,000 square feet to boutique areas for juvenile products. The specialty juvenile stores
range from 30,000 to 45,000 square feet in size and allocate approximately 2,000 to 3,000 square
feet to traditional toy products. The SBS stores are a combination of Toys "R" Us and Babies "R"
Us (BRU) stores. The SBS stores typically range in size from 30,000 to 70,000 square feet and
allocate approximately 20,000 to 40,000 square feet to traditional toy products and approximately
10,000 to 30,000 square feet to juvenile products. Each of the Express stores has a cumulative
lease term of at least two years and typically ranges in size from 2,000 to 7,000 square feet. The
company's flagship stores range in the size of 55,000 to 105,000 square feet.
The company also sells its merchandise through various internet sites, including Toysrus.com,
Babiesrus.com, eToys.com, FAO.com and toys.com, as well as other internet sites in international
markets.
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Toys “R” Us, Inc.
History
HISTORY
TRU was established in 1948 by Charles Lazarus. The company opened its first toy supermarket in
1957. It was listed on the New York Stock Exchange in 1978.
In 1980s, the company diversified its portfolio and extended "R" Us brand. In 1983, TRU opened its
first Kids "R" Us stores in Paramus, New Jersey and Brooklyn, New York. Later in 1984, the company
opened its first two international stores in Singapore and Canada.
TRU launched Babies "R" Us (BRU) stores, a baby products retailer and specialty store chain, in
1996. To further strengthen its position in the rapidly growing educational and learning toys business,
the company purchased Imaginarium in 1998. In the same year, it launched www.Toysrus.com.
In 2000, the company acquired SB Toys. In the following year, TRU opened its international flagship
store in New York City's Times Square. The company, in 2002, expanded its retail agreement with
WizKids to sell WizKids' Infinity Challenge in stores nationwide.
Toysrus.com filed a lawsuit against Amazon.com in 2004 to protect its exclusivity rights in the toy
and game and baby products categories for its online e-commerce site on the Amazon.com platform.
In 2005, TRU was acquired by an investment group consisting of Bain Capital Partners, Kohlberg
Kravis Roberts & Company and Vornado Realty Trust for $6.6 billion. The acquisition included all
worldwide operations of the company, including the TRU and BRU businesses. TRU subsequently
became a private company. In the same year, TRU opened BRU's first store in Manhattan.
In 2006, the company partnered with GSI Commerce, a provider of e-commerce solutions, and Exel,
a North American contract logistics provider, to support a new platform for its online businesses
Toysrus.com and Babiesrus.com.
The Al Futtaim Group opened a TRU outlet in UAE in 2007. The company introduced two exclusive
new pet product lines in the same year. Also, the company opened its first TRU store in South Korea
in 2007.
TRU launched an exclusive line of environmentally friendly toys under the Toys "R" Us brand in
2008. In the same year, BRU entered into an exclusive partnership with designer Amy Coe to offer
an extensive new collection of baby merchandise. TRU launched an enhanced version of its US
e-commerce site, www.Toysrus.com, with new features and functionality during 2008.
In 2009, the company introduced ‘Gift Card Exchange Program,’ allowing customers with KB Toys
gift cards to take advantage of special savings at its stores nationwide. In the same year, TRU
acquired the e-commerce site, eToys.com. The transaction also included the acquisition of
e-commerce site BabyUniverse.com and the parenting resource website ePregnancy.com. Also in
2009, the company introduced "R" Market, a new dedicated shop featuring an expanded assortment
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Toys “R” Us, Inc.
History
of consumables and commodities, in select Toys"R"Us stores. During the year, TRU also introduced
"$1-$2-$3 Fun!" feature shops in the front of its stores. Each shop featured approximately 100 items
for $1, $2 or $3 with themes such as dinosaurs, games and fun toys, princess dress up, musical
instruments, art supplies and party favors.
Further in 2009, TRU acquired FAO Scwartz, another children's retailer. The acquisition allowed the
company to grow its toy specialist market share and draw upon the strengths of an established brand
to develop products that differentiated it from the mass market competitors. In the same year, BRU
launched an exclusive collection of fashion-forward baby products by designer Cynthia Rowley to
further increase the assortment of differentiated merchandise offerings. Later in 2009, TRU introduced
a video game trade-in program at its stores nationwide, thereby entering the lucrative used games
market. This helped the company to also provide customers a range of value oriented products to
drive traffic.
In 2010, TRU introduced an exclusive line of baby essentials marketed under BRU brand name.
Through this, the company further expanded its juvenile product offerings. In the same year, the
company announced plans to raise $800 million through an initial public offer. Also in 2010, the
company entered into an agreement with LittleMissMatched for the launch of lifestyle products for
kids and tweens at its stores.
Pursuing its new pop-up store format to tap the Christmas spending, in 2010, the company announced
plans to open 600 pop-up stores in malls and shopping centers. In the same year, FAO Schwarz
also announced plans to open 10 pop-up stores for the 2010 Christmas season. Later in 2010, the
company launched a multi-channel service integrating its in-store and online shopping services. The
new service enables customers to place orders online and pick them up the same day in any BRU
store or in the designated TRU stores in the US.
In 2011, TRU launched its first-ever collection of wood vehicles, track and playsets based on the
Pixar movie, Cars. TRU completed the installation of the 5.38 megawatt rooftop solar power system
at its largest distribution center in Flanders, New Jersey in the same year. Later in the year, the
company completed the construction of its new dedicated e-commerce fulfillment center near Reno,
Nevada, to increase its online order capacity and expedite deliveries to customers in the western
US.
Also in 2011, TRU and Li & Fung entered into a joint venture agreement for Toys "R" Us business
in Southeast Asia and Greater China. With this agreement, TRU's existing licensed operations
throughout Asia became 70% majority owned and would be controlled by it and remaining 30%
owned by Li & Fung. As per the terms of the joint venture, TRU can also acquire the remaining share
of the business in the future. In the same year, TRU partnered with Pretty Ugly (the manufacturer
and distributor of the Uglydoll brand of plush characters) to introduce Uglydoll products in all the US
stores of TRU, as well as an Uglydoll shopping environment online at Toysrus.com.
Further in 2011, the company redesigned its assortment of consumer electronics and tech accessories.
The new and expanded product categories included prepaid mobile phones, tablet computers,
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Toys “R” Us, Inc.
History
headphones, iPod docks, digital cameras and accessories for the Apple ecosystem. Later, the
company opened its first store in Poland and expanded its presence in Europe.
In early 2012, GE Capital Retail Bank announced a definitive multi-year agreement with TRU to
provide the consumer credit card program in the US and Puerto Rico. Around the same time, the
Canadian loyalty business of Alliance Data Systems Corporation announced a new multi-year
agreement with Toys "R" Us Canada to issue AIR MILES reward miles in all the stores of the company
across Canada.
BRU partnered with Heidi Klum (a designer) in the second quarter of 2012 to create an exclusive
collection of affordable luxuries for babies. The new collection, Truly Scrumptious by Heidi Klum,
would be available in all BRU stores across North America and online at Babiesrus.com. In the same
quarter, Destination Maternity Corp announced plans to discontinue its partnership with BRU. Fireswirl
Technologies' subsidiaries, Fireswirl Asia and Beijing Xingchang Xinda Technology Development,
jointly signed an agreement with Toys "R" Us Retailing (China) to provide e-commerce operation
service to all the stores of the company across China, including the Taobao flagship store.
In the third quarter of 2012, TRU opened its first stores in Beijing, China.The company also introduced
its first wi-fi tablet, tabeo. The 7-inch, multi-touch tablet features 50 free, preinstalled apps to entertain
and educate children, while helping them explore the internet. Later in the year, TRU launched
Toys“R”Us Movies, a digital entertainment service that provides instant access to the movies and
TV shows for kids.The company announced the availability of international shipping for online orders
on Toysrus.com and Babiesrus.com to more than 60 countries across Asia, the Caribbean, Central
America, Europe, North America and South America. TRU partnered with i-parcel, an air express
company, to provide international shipping for online orders to its customers. Further in the year,
the company launched Pay In Store, a new payment option for orders placed through Toysrus.com
and Babiesrus.com. This allows customers to shop online and make payment in any one of the
company’s stores across the US.
Subsequently, TRU formed a partnership with Thyme Maternity, a maternity fashion brand from
Montreal-based Reitmans Canada, to launch a collection of maternity apparel and accessories
exclusively to its BRU customers in the US. The company also launched a dedicated web store,
Toysrus.com.cn, in China. Towards the end of 2012, TRU partnered with Ubisoft, a producer,
publisher and distributor of interactive entertainment products, to create Toys“R”Us Towers, a
free-to-play toy store simulation game, available on Facebook and on mobile devices.
In March 2013, BRU entered into a strategic partnership with WhatToExpect.com, Heidi Murkoff’s
pregnancy and parenting website, to offer expectant moms convenient access to their combined
content and retail resources. Nickelodeon launched its first retail store ‘Nick Shop’ in Toys“R”Us
Times Square flagship store in May 2013. The Nick Shop features exclusive New York-branded
products such as kids and adult apparel, accessories, plush toys, drinkware, home goods and others,
featuring Nickelodeon characters including Dora the Explorer, Bubble Guppies, Team Umizoomi,
Winx Club, SpongeBob SquarePants and Teenage Mutant Ninja Turtles.
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History
TRU introduced its own gift card program in its stores in 41 locations in China in August 2013. In
the same month, BRU introduced Sadie & Scout, a collection of fashion-forward bedding and room
decor for baby featuring 40 distinct items. Also in August 2013, the company introduced an exclusive
range of do-it-yourself accessories and crafts, designed by actress and musician Victoria Justice,
for the company’s Totally Me! brand. The new line features 16 items, including customizable
necklaces, bracelets, rings, shoes, hats and others. In the same month, TRU announced the
expansion of its year-round education product selection in stores nationwide and online at
Toysrus.com. The enhanced assortment of education products included workbooks, flash cards,
activity kits and other products for kids from preschool to fifth grade.
The company introduced Trick“R”Treat “Boo”tiques in its stores and online at Toysrus.com in
September 2013. These in-store shops feature a broad assortment of Halloween costumes,
accessories, candy, and gear among others. In October 2013, TRU introduced Monster 500, a new
line of toys featuring 10 characters as small and large vehicles, as well as two playsets. These toys
were designed and created in collaboration with Creata, a kids marketing and toy company.
RIDEMAKERZ opened a new 1,300 square feet experiential store-within-a-store at the FAO Schwarz
Fifth Avenue in November 2013.The RIDEMAKERZ build table in the FAO Schwarz (brand exclusively
operated by TRU) store allows customers to assemble their rides, attaching the body of the RIDEZ
to the chassis and adding their custom rims and tires. In the same month, the company launched
its revamped and updated YouTube channel, a platform for streaming exclusive, original and
entertaining programming for kids and families. During the same time, the company redesigned and
updated its e-commerce sites with new features and easier-to-use navigation, Toysrus.com and
Babiesrus.com.The company also added social shopping to these websites, through which customers
can organize their most-wanted items in shareable toy and baby boards and also view the popular
products.
Babies "R" Us entered into a strategic partnership with TheBump.com, a US-based pregnancy and
parenting website, in January 2014. As a result of this alliance, the Babies”R”Us registry will be
available to a whole new group of parents-to-be who can create and share their registry directly from
TheBump.com via its Gift Registry Center.
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Toys “R” Us, Inc.
Key Employees
KEY EMPLOYEES
Name
Job Title
Board
Antonio Urcelay
Chairman of the Board and Chief
Executive Officer
Executive Board
Joshua Bekenstein
Director
Non Executive Board
Michael M. Calbert
Director
Non Executive Board
Michael D. Fascitelli
Director
Non Executive Board
Richard A. Goodman
Director
Non Executive Board
Matthew S. Levin
Director
Non Executive Board
Wendy Silverstein
Director
Non Executive Board
Nathaniel H. Taylor
Director
Non Executive Board
Michael Ward
Director
Non Executive Board
Richard L. Markee
Director
Non Executive Board
Richard Barry
Executive Vice President and Chief Senior Management
Merchandising Officer
F. Clay Creasey, Jr.
Executive Vice President and Chief Senior Management
Financial Officer
Deborah Derby
Vice Chairman and Executive Vice
President
Senior Management
Monika M. Merz
President, Asia Pacific
Senior Management
Troy Rice
Executive Vice President, Stores
and Services
Senior Management
David J. Schwartz
Executive Vice President, General
Counsel and Corporate Secretary
Senior Management
Hank Mullany
President, US
Senior Management
Wolfgang Link
President, Europe
Senior Management
Jacobo Caller
Managing Director, Iberia
Senior Management
Andre Javes
Managing Director, Southeast Asia Senior Management
and Greater China
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Compensation
3005328 USD
245000 USD
1670848 USD
3229770 USD
2193662 USD
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Toys “R” Us, Inc.
Key Employee Biographies
KEY EMPLOYEE BIOGRAPHIES
Antonio Urcelay
Board: Executive Board
Job Title: Chairman of the Board and Chief Executive Officer
Since: 2013
Age: 61
Mr. Urcelay has been the Chairman of the Board and Chief Executive Officer at TRU since November
2013. He most recently served as the President of Europe at the company from 2010 to October
2013, and also as the interim Chief Executive Officer. Prior to joining TRU in 1996, Mr. Urcelay spent
the majority of his career working in retail and the consumer packaged goods industry. He previously
served as the Managing Director at Leche Pascual. Mr. Urcelay spent 11 years as the Head of the
Spanish division for a British-owned supermarket chain, becoming a member of the Board of Directors
of its parent company, the Ashley Group. Prior to that, he spent six years at Royal Ahold, where he
held various leadership positions, including Managing Director of the Spanish market. Mr. Urcelay
also served as a Marketing Manager at the Spanish subsidiary of Procter & Gamble. He spent five
years practicing law at the international law firm Cremades.
Joshua Bekenstein
Board: Non Executive Board
Job Title: Director
Since: 2005
Age: 54
Mr. Bekenstein has been a Director at TRU since 2005. He currently serves as a Managing Director
at Bain Capital. Mr. Bekenstein has been with Bain Capital since its founding in 1984. He currently
also serves as a member of the Board of Directors at Bombardier Recreational Products, Waters
Corporation, Dollarama Capital Corporation, Burlington Coat Factory, Michaels Stores, Bright Horizons
Family Solutions and The Gymboree Corporation.
Michael M. Calbert
Board: Non Executive Board
Job Title: Director
Since: 2005
Age: 50
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Key Employee Biographies
Mr. Calbert has been a Director at TRU since 2005. He has also been an Executive at Kohlberg
Kravis Roberts since 2000. Mr. Calbert currently also serves as a member of the Board of Directors
at Dollar General Corporation.
Michael D. Fascitelli
Board: Non Executive Board
Job Title: Director
Since: 2005
Age: 56
Mr. Fascitelli has been a Director at TRU since 2005. He was the Chief Executive Officer at Vornado
Realty Trust from 2009 until February 2013 and was the President and a Trustee at Vornado Realty
Trust from 1996 until February 2013. Mr. Fascitelli has also been the President and a Director at
Alexanders since 1996. Mr. Fascitelli was on the Board of Directors at GMH Communities Trust from
2005 to 2008.
Richard A. Goodman
Board: Non Executive Board
Job Title: Director
Since: 2011
Age: 64
Mr. Goodman has been a Director at TRU since 2011. He served as the Executive Vice President
of Global Operations at PepsiCo from 2010 until his retirement in 2011. From 2006 to 2010, Mr.
Goodman served as the Chief Financial Officer at PepsiCo. Prior to that, from 2003 to 2006, he
served as the Chief Financial Officer of PepsiCo International. Mr. Goodman currently also serves
as a Director at Johnson Controls and Western Union.
Matthew S. Levin
Board: Non Executive Board
Job Title: Director
Since: 2005
Age: 46
Mr. Levin has been a Director at TRU since 2005. He has also been a Managing Director at Bain
Capital since 2000. Mr. Levin also currently serves as a Director at Bombardier Recreational Products,
Dollarama Capital Corporation, Michaels Stores, Unisource Worldwide, Edcon Holdings, Lilliput
Kidswear and Guitar Centers.
Wendy Silverstein
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Key Employee Biographies
Board: Non Executive Board
Job Title: Director
Since: 2005
Age: 52
Ms. Silverstein has been a Director at TRU since 2005. She has also been an Executive Vice
President and Co-Head of Acquisitions and Capital Markets at Vornado since 2010. Ms. Silverstein
served as the Executive Vice President of Capital Markets at Vornado from 1998 until 2010.
Nathaniel H. Taylor
Board: Non Executive Board
Job Title: Director
Since: 2011
Age: 36
Mr. Taylor has been a Director at TRU since 2011. He is a member of the general partner of KKR
& Co., and he has been an investment professional at KKR since 2005.
Michael Ward
Board: Non Executive Board
Job Title: Director
Since: 2007
Age: 49
Mr. Ward has been a Director at TRU since 2007. He is a Managing Director at Bain Capital. Mr.
Ward has been with Bain Capital since 2002. He currently also serves as a member of the Board
of Directors at Sensata Technologies.
Richard L. Markee
Board: Non Executive Board
Job Title: Director
Since: 2013
Age: 60
Mr. Markee has been a Director at TRU since November 2013. He has served as the Executive
Chairman at Vitamin Shoppe since 2011. From 2009 to 2011, he served as the Chief Executive
Officer and Chairman of the Board of Directors at Vitamin Shoppe. Mr. Markee was an Operating
Partner at Irving Place Capital Management, a private equity firm focused on making equity
investments in middle-market companies, from 2008 to 2009. From 2006 to 2008, he was an Operating
Partner at Bear Stearns Merchant Banking, the predecessor to Irving Place Capital Management.
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Toys “R” Us, Inc.
Key Employee Biographies
In addition, Mr. Markee previously served in a number of capacities at the company, including Vice
Chairman from 2004 to 2006 and Interim Chief Executive Officer from 2005 to 2006.
Richard Barry
Board: Senior Management
Job Title: Executive Vice President and Chief Merchandising Officer
Since: 2012
Age: 46
Mr. Barry has been an Executive Vice President and the Chief Merchandising Officer at TRU since
2012. He joined the company in 1985 as a part-time employee in the UK, and in 2004, he was
promoted to Merchandising Director for Toys “R” Us, International. In the following year, Mr. Barry
was appointed the Vice President, Divisional Merchandising Manager for the learning, electronics
and entertainment businesses for the company’s US toy stores. In 2010, he was named the Vice
President, General Merchandising Manager, Toys “R” Us, US. In 2012, Mr. Barry was promoted to
a Senior Vice President and the Chief Merchandising Officer. Mr. Barry serves on the Board at the
Entertainment Merchants Association. He also serves on the Board of Directors at the Toy Industry
Association.
F. Clay Creasey, Jr.
Board: Senior Management
Job Title: Executive Vice President and Chief Financial Officer
Since: 2006
Age: 64
Mr. Creasey has been an Executive Vice President and the Chief Financial Officer at TRU since
2006. From 2005 to 2006, he served as the Chief Financial Officer at Zoom Systems. During
1992-2005, Mr. Creasey held various roles at Mervyn's, a subsidiary of Target, most recently as the
Senior Vice President of Finance and Chief Financial Officer from 2000 to 2005.
Deborah Derby
Board: Senior Management
Job Title: Vice Chairman and Executive Vice President
Since: 2013
Age: 49
Ms. Derby has been the Vice Chairman and an Executive Vice President at TRU since 2013. She
served as an Executive Vice President and the Chief Administrative Officer at the company from
2009 until 2012. Ms. Derby also served as the President of BRU. She joined TRU in 2000, and
thereafter held a number of human resources roles including Corporate Secretary and Executive
Vice President, Human Resources, Legal and Corporate Communications for the global enterprise.
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Toys “R” Us, Inc.
Key Employee Biographies
Prior to joining the company, Ms. Derby spent eight years at Whirlpool Corporation in various human
resources roles. She joined Whirlpool from the law firm Miller, Canfield, Paddock and Stone, where
she was an Attorney specializing in employment law.
Monika M. Merz
Board: Senior Management
Job Title: President, Asia Pacific
Since: 2011
Age: 63
Ms. Merz has been the President of Asia Pacific at TRU since 2011. Prior to this, she served as the
President and Chief Executive Officer at Toys "R" Us, Japan from 2007. During 2000–07, Ms. Merz
served as the President at Toys "R" Us, Canada. Before that, from 1996 to 2000, she served as the
Vice President and General Merchandise Manager at Toys "R" Us Canada.
Troy Rice
Board: Senior Management
Job Title: Executive Vice President, Stores and Services
Since: 2012
Age: 49
Mr. Rice has been the Executive Vice President of Stores and Services at TRU since 2012. He
joined the company in 2006 as Senior Vice President, Store Operations. Prior to joining the company,
Mr. Rice spent more than 15 years at Home Depot, where he began his career in retail in 1990 as
Associate Manager. He held various Regional and Divisional Management roles, including Senior
Vice President of Operations and Division President, Northern Division at Home Depot.
David J. Schwartz
Board: Senior Management
Job Title: Executive Vice President, General Counsel and Corporate Secretary
Since: 2009
Age: 45
Mr. Schwartz has been Executive Vice President, General Counsel and Corporate Secretary at TRU
since 2009. From 2003 to 2009, he served as Senior Vice President and General Counsel at the
company. Mr. Schwartz also served as Vice President and Deputy General Counsel at TRU from
2002 to 2003. He was the Vice President, Corporate Counsel and Assistant Corporate Secretary at
the company from 2001 to 2002.
Hank Mullany
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Toys “R” Us, Inc.
Key Employee Biographies
Board: Senior Management
Job Title: President, US
Since: 2013
Age: 55
Mr. Mullany has been the President of the US business at TRU since November 2013. He previously
served as the Chief Executive Officer at The ServiceMaster Company, a residential and commercial
service business, and prior to that, he was the Executive Vice President of Walmart US and the
President of Walmart’s northern business.
Andre Javes
Board: Senior Management
Job Title: Managing Director, Southeast Asia and Greater China
Since: 2014
Mr. Javes has been the Managing Director, Southeast Asia and Greater China at TRU since January
2014. Prior to this, he served as the Managing Director, Australia at the company. He has more than
30 years of experience in the Australian market, rejoined Toys“R”Us, Australia, having first joined
the company in 2008 as General Merchandise Manager. Mr. Javes served as the Chief Executive
Officer at Anaconda Group from 2009 to 2012. Earlier in his career, Mr. Javes worked at Kmart as
Divisional Merchandise Manager for Toy & Outdoor products in Australia and New Zealand. He also
served as Group Merchandise Manager for Grocery at Coles Supermarkets Australia.
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Toys “R” Us, Inc.
Major Products and Services
MAJOR PRODUCTS AND SERVICES
TRU is a specialty retailer of toys and baby products. The company's key products and brands
include the following:
Products:
Arts and crafts
Baby toys
Boys and girls toys, such as action figures, dolls and doll accessories, role play toys and vehicles
Baby gear
Infant care products
Apparel
Commodities
Furniture
Bedding
Room decor
Educational electronics
Developmental toys
Construction toys, games and creative activities
Pre-school merchandise including learning products, activities and toys
Video game software
Systems and accessories
Tablet computers
Electronics and other related products
Seasonal toys and other products
Bikes, sporting goods, play sets and other outdoor products
Brands:
Toys ''R'' Us
Babies "R" Us
Journey Girls
Imaginarium
Fast Lane
You & Me
Just Like Home
True Heroes
Totally Me!
Dream Dazzlers
Fao Schwarz
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Toys “R” Us, Inc.
Revenue Analysis
REVENUE ANALYSIS
Overview
TRU recorded revenues of $13,543 million in FY2013, a decrease of 2.6% compared to FY2012.
For FY2013, the US, the company's largest geographic market, accounted for 60.2% of the total
revenues.
TRU reports its revenues through two operating segments, defined based on geographical presence:
Toys "R" Us-domestic (60.2% of the total revenues in FY2013) and Toys "R" Us-international (39.8%).
Revenue by segment
In FY2013, the Toys "R" Us-domestic segment recorded revenues of $8,149 million, a decrease of
2.9% compared to FY2012.
The Toys "R" Us-international segment recorded revenues of $5,394 million in FY2013, a decrease
of 2.2% compared to FY2012.
Revenue by geography
The US, TRU's largest geographic market, accounted for 60.2% of the total revenues in FY2013.
Revenues from the US reached $8,149 million in FY2013, a decrease of 2.9% compared to FY2012.
Japan accounted for 13.3% of the total revenues in FY2013. Revenues from Japan reached $1,795
million in FY2013, a decrease of 9.7% compared to FY2012.
Canada accounted for 6.9% of the total revenues in FY2013. Revenues from Canada reached $928
million in FY2013, an increase of 5% over FY2012.
The UK accounted for 5.4% of the total revenues in FY2013. Revenues from the UK reached $735
million in FY2013, a decrease of 3% compared to FY2012.
Australia accounted for 1.8% of the total revenues in FY2013. Revenues from Australia reached
$248 million in FY2013, an increase of 1.2% over FY2012.
Europe (excluding the UK) accounted for 10.6% of the total revenues in FY2013. Revenues from
Europe (excluding the UK) reached $1,439 million in FY2013, a decrease of 8.6% compared to
FY2012.
China and Southeast Asia accounted for 1.7% of the total revenues in FY2013. Revenues from
China and Southeast Asia reached $233 million in FY2013, compared to $49 million in FY2012.
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Revenue Analysis
Other countries accounted for 0.1% of the total revenues in FY2013. Revenues from other countries
reached $16 million in FY2013, a decrease of 11.1% compared to FY2012.
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Toys “R” Us, Inc.
SWOT Analysis
SWOT ANALYSIS
TRU is a specialty retailer of toys and baby products. What sets apart the company from its
competitors are its integrated store formats. By leveraging its integrated store formats, TRU can not
only obtain the sales benefits but also attain a competitive edge over other companies in the industry.
However, the growing competition in the toys retailing industry can make TRU's results of operations
more sensitive to the competitive pricing practices and adversely affect its margins.
Strengths
Weaknesses
Integrated store formats provide a
competitive edge over other companies
International market presence facilitates
large customer base and diversified revenue
stream
‘Pop-up’ stores to tap the increase in
customer spending during holiday season
Involvement in anti-competitive practices
Opportunities
Threats
Increased influence by children on spending
will boost kids-focused businesses
Private label portfolio enhances exclusivity,
margins and pricing power
Creating a niche for itself in the toys market
for differentially abled children
Innovative services to increase convenience
for customers
Competition intensified from non-specialists
and new entrants leading to price wars
Declining retail sales of toys in the US
Rising labor costs
Strengths
Integrated store formats provide a competitive edge over other companies
TRU's integrated store formats differentiate the company from its competitors. The company's SBS
stores combine the Toys "R" Us (comprising toy and entertainment offerings) and Babies "R" Us
(comprising juvenile offerings) merchandise offerings under one roof. The integration of juvenile
merchandise with toy and entertainment offerings has enabled the company to create a ‘one-stop
shopping’ experience for its customers. The product assortment offered by SBS stores allows the
company to tap the needs of new parents as customers during pregnancy, and later become a
resource for infant products such as baby formula, diapers and solid foods. The opportunity to
establish first contact with new parents enables the company to further develop relationship with
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SWOT Analysis
customers as their children grow and transition to become consumers of its toy products. Additionally,
juvenile merchandise such as baby formula, diapers and infant clothing mitigates the inherent
seasonality in the toy business. In comparison, Build-A-Bear Workshop, the company's key competitor,
is solely engaged in the sale of toys, with stuffed toys being its main offering. The company has
been increasing the number of SBS stores both domestically and internationally. In FY2013, the
company converted 281 existing stores into SBS store format. Additionally, TRU also opened 93
SBS stores (51 of which were relocations of existing stores) during the year.
TRU also continued to implement juvenile integration strategy with its Babies "R" Us Express and
Juvenile Expansion formats which devote additional square footage to the company's juvenile
products within its traditional TRU stores. The company has so far improved 100 existing TRU stores
with these layouts since the implementation of these integrated store formats.
Thus, by leveraging its integrated store formats, TRU can not only obtain the sales benefits but also
attain a competitive edge over other companies in the industry.
International market presence facilitates large customer base and diversified revenue stream
TRU has, over the years, diversified from the US market and established presence across several
countries. In FY2013, revenues from the company’s international operations accounted for 39.8%
of the company's consolidated net sales. The company's international segment sells a variety of
products in the core toy, entertainment, juvenile, learning and seasonal categories through 828
owned and licensed stores that operate in 35 countries and through the internet. TRU has
wholly-owned operations in Australia, Austria, Brunei, Canada, China, France, Germany, Hong
Kong, Japan, Malaysia, Poland, Portugal, Singapore, Spain, Switzerland, Taiwan, Thailand and the
UK. The company has online presence in Australia, Austria, Canada, France, Germany, Japan, the
Netherlands, Portugal, Spain, Switzerland and the UK. The company also expanded its global reach
through the introduction of its Chinese website during FY2013. TRU also introduced international
shipping for on-line orders to more than 60 countries across Asia, the Caribbean, Central America,
Europe, North America and South America. Furthermore, the company’s licensing business helps
it to foray into new markets and take advantage of the local expertise with low investments in fixed
assets. The company had 163 “R” Us branded retail stores ranging in various sizes at the end of
FY2013.
International presence reduces the business risk as TRU is not exposed to vagaries of a single
economy. Additionally, it gives global scale and increases the customer base. Toy industry has very
few global players, and therefore, the company's international presence facilitates large customer
base and diversified revenue stream.
‘Pop-up’ stores to tap the increase in customer spending during holiday season
The company's business is highly seasonal in nature. During FY2013, FY2012 and FY2011,
approximately 43% of the net sales from the company's worldwide business and a substantial portion
of its cash flows from operations were generated in the fourth quarter comprising the holiday season.
Even in times of downturn, Christmas still is the most important season as it is the period that
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SWOT Analysis
witnesses highest consumer spending. In order to maximize its sales during the fourth quarter, TRU
makes use of pop-up stores typically ranging in the size of 2,000–7,000 square feet. TRU opened
its first pop-up store in FY2009, with nearly 90 TRU Express locations across the US. During FY2013
holiday season, the company operated 303 Express stores of which 125 were still open as of February
2, 2013. The company's pop-up stores drive revenues during the Christmas season and enable it
to capture a large share of the increased consumer spending.
Weaknesses
Involvement in anti-competitive practices
TRU was found to be involved in several anti-competitive practices in the recent times. In 2010,
antitrust investigators from the Japan Fair Trade Commission raided the head office of Toys ''R''
Us-Japan for possible violation of the Antimonopoly Law by the company by allegedly underpaying
its suppliers. The company was suspected of paying low prices to its suppliers for toys and baby
products on the grounds that the company sold the suppliers' unsold items at discount prices. The
toy store chain was also suspected to have forced suppliers to take back unsold items. Toys ''R'
'Us-Japan's activities could be viewed as an abuse of dominant bargaining position, an unfair trade
practice as per the Antimonopoly Law. The law prohibits large-scale retailers, such as department
stores and supermarket chain operators, from abusing their dominant position in trade with suppliers.
Surcharges are imposed on those who abuse dominant bargaining position. In December 2011, the
Japan Fair Trade Commission issued a cease-and-desist order, and a surcharge payment order to
Toys ''R'' Us-Japan of approximately $5 million.
Previously, in 2009, the Federal Trade Commission (FTC) in the US started probing the company's
practices for a possible violation of the 1998 FTC order. The order prohibits TRU from asking any
of its suppliers to curb the supply of products or refuse to sell to discounters. It also bars the company
from asking its suppliers about their respective sales to any toy discounter. The order also requires
the company to preserve and maintain a record of communication made with its suppliers related
to the latter's sales and distribution. The probe by the FTC found that the company had used its
dominant position to extract agreements from toy manufacturers to stop selling the same toys to
warehouse clubs. This practice was in violation of the 1998 FTC order. As a result, in May 2011,
the company paid $1 million in the form of civil penalty and settled the FTC charges.
Involvement in such practices exposes the company to investigations and penalties which are
counter-productive expenses. Most importantly, TRU's relationships with the suppliers will be strained
and this could impact the availability of products for the company.
Opportunities
Increased influence by children on spending will boost kids-focused businesses
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Toys “R” Us, Inc.
SWOT Analysis
The influence that children have on family purchasing decisions has been increasing in the US.
According to industry estimates, direct spending by children in the US is over $50 billion annually
while parents and family members spend an additional $170 billion annually on children. In addition,
children influence billions of dollars in other family spending. A key reason for this has been the
change in the advertising strategies adopted by the industry. The advertisements for toys and other
products for children were previously mainly targeted towards parents, and with a direct message.
However, the advertisements are now more sophisticated, and aimed at children directly. Additionally,
these advertisements are less recognizable as a sales pitch. While eating at a child oriented fast
food restaurant, a child may receive a toy. That toy may also be tied to a movie, a cartoon, a video
game, or to a website that offers additional games, toys, and related products. There are a seemingly
endless number of products that are presented to the child. In such a scenario, the growing number
of children in the US would facilitate the market for child oriented products. According to the US
Census Bureau, in 2009 there were over 62 million children aged 14 and under in the US. The size
of this population group is projected to remain relatively stable over the next decade.This is expected
to benefit TRU and boost its revenues.
Private label portfolio enhances exclusivity, margins and pricing power
The growing penetration of private labels market-wide indicates increased acceptance of these
private label brands. Private labels scored strong gains across the major US retail channels in the
recent years as consumers increasingly switched from national brands and drove store brands
growth in both volume and total revenue, according to industry sources. According to industry
estimates, among all major US retail channels, private label sales increased by approximately 3%
to exceed $107.5 billion in 2012. Since 2009, the annual growth of store brand sales has averaged
approximately 5%, compared to 2% for national brands. The trend is estimated to continue as there
has been a basic shift in the consumer preference towards value products.
Increased penetration of private labels offers several advantages to the retailers. Private label goods
are priced low compared to the national brands, this helps in attracting value oriented customers.
Besides, due to the lack of advertising and marketing expenses they provide double advantage to
the retailer when it comes to the profit margins. Not only they give a higher margin to the retailers,
private labels have also changed the balance of power between brand manufacturers and retailers,
giving the latter an advantage when negotiating terms with the brand manufacturers. As the private
label offerings increase and the quality is assured, a high sense of loyalty is cultivated among the
company's customer base. This customer loyalty is the result of an affinity with the retailer brand
which implies that the development of private label brands can tangibly enhance the retailer's brand
itself. Thus, in the long run, private labels can become an important tool for the retailer to establish
its positioning and strategically attract the target customers to its outlet.
TRU has built a strong private label portfolio which includes merchandise under the names such as
Babies "R" Us, Journey Girls, Imaginarium, Fast Lane, You & Me, Just Like Home, True Heroes,
Totally Me!, Dream Dazzlers, and Fao Schwarz. TRU opened a sourcing office in China in FY2011
to work with vendors and expand its private label product offerings further. The company's focus on
expanding its private labels offering will help it to attract more value oriented customers.
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SWOT Analysis
Creating a niche for itself in the toys market for differentially abled children
Autism is a kind of developmental disorder which causes impaired communications and social
interaction in a child. As a result, the requirements of these children are very different. TRU offers
several toys suited for autistic children. It also releases an annual guide giving in-depth information
about how each of its autistic toys can be used to develop certain skills in a differentially abled child.
The company, through its merchandise focused on the needs of differentially abled children, can
establish itself in the niche market, which has very few players besides TRU, including Able Play,
and Discover Toys. Few players in the market reduce competition and price wars and will help TRU
to grow its presence in a new target market.
Innovative services to increase convenience for customers
The company has launched several innovative services in the recent times, to increase convenience
for customers. In line with its long term growth strategy in China, TRU introduced its own gift card
program in its stores throughout the country, in August 2013. The gift cards, which are made available
for purchase in the company’s 41 locations, can be redeemed in any TRU store in the country. These
gift cards are available in two categories, fixed-value and open-value gift cards. Fixed-value cards
are available in CNY200 (approximately $33), CNY500 (approximately $82) and CNY1,000
(approximately $163) denominations, and open-value cards can be loaded with any amount a
customer chooses between CNY100 (approximately $16.5) and CNY1,000 (approximately $163).
In March 2013, BRU entered into a strategic partnership with WhatToExpect.com, Heidi Murkoff’s
pregnancy and parenting website, to offer expectant moms convenient access to their combined
content and retail resources. As part of this collaboration, the Babies“R”Us Registry was made
available on WhatToExpect.com. Additionally, the content from WhatToExpect.com will be featured
through various BRU channels.
Previously, in October 2012, the company launched Pay In Store, a new payment option for orders
placed through Toysrus.com and Babiesrus.com. This allows customers to shop online and pay for
them in any one of the company’s stores across the US. It serves as a convenient alternative payment
option for customers who do not have a credit card or do not want to use their credit card online.
Through various innovative services, TRU can cater to the demands of the growing customer base
that prefers to shop online and increase the average spend by customers on its offerings.
Threats
Competition intensified from non-specialists and new entrants leading to price wars
TRU operates in one of the toughest competitive environments. Children's and infant products are
favorites of all the retailers especially during downturn as they are resilient and attract high customer
spending. Strong competition in the toy retailing business is therefore a concern as strategies adopted
by peers can impair the growth of the company. TRU competes with a number of retailers, including
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Toys “R” Us, Inc.
SWOT Analysis
other toy retailers, discounters, and catalog and internet businesses. In recent times, price wars
have been the most prominent of the competitive strategies. Especially during the holiday season,
price wars in the toy retailing market become more intense. For instance, in 2011, Wal-Mart
announced layaway (a service where customers can purchase a product without paying the entire
cost at once) on toys during the holiday season. This is the first time Wal-Mart announced this since
2006. In addition, Wal-Mart also cut prices on a number of toys during the holiday season. Also,
Target has aggressively slashed prices on toys during holiday season to lure shoppers. Target
slashed prices on a number of hot toys, undercutting Wal-Mart by nearly 19%. These price wars
have been forcing TRU to also adopt an aggressive pricing strategy to avoid customer attrition.
Furthermore, several non-specialist retailers have also increased the space for selling children and
infant products. According to industry sources, mass merchants were the most popular channel for
toy purchases, with a market share of approximately 49% in 2011. This indicates that these channels
are increasingly attracting the customers to these non-core products. Additionally, these multi-line
retailers have an advantage of a larger customer base which is hard to beat.The entry of new players
in the industry is also expected to further fuel the competition. The book store chain Barnes & Noble,
which has been dedicating more space to hobby items and educational toys.
The growing competition in the toys retailing industry can make TRU's results of operations more
sensitive to the competitive pricing practices and adversely affect its margins.
Declining retail sales of toys in the US
The retail sales of toys in the US witnessed a decline in recent times. According to industry estimates,
the retail sales of toys in the US totaled $16.5 billion in 2012, a decrease of 0.6% compared to $16.6
billion in 2011. The growing digitalization of the media and entertainment industry poses a threat to
the traditional toy market. Online and wireless games categories are gaining popularity. One of the
reasons for the decline in traditional toys in the US is the growing popularity of mobile devices used
by children aged two to 12 for gaming, music and taking pictures. As per industry sources, children
use mobile devices such as smartphone, tablet or iPod Touch approximately five days a week, with
an average session lasting just under one hour. Going forward, traditional toys will have to assert
themselves increasingly in a more digital world. Thus, growing usage of mobile devices for gaming
and other purposes as well as growing preference for electronic games could adversely impact the
sales of traditional toys offered by TRU.
Rising labor costs
Labor costs have risen in the US and Europe in recent years. Tight labor markets, increased overtime,
government mandated increases in minimum wages and a higher proportion of full-time employees
are resulting in an increase in labor costs for employers in the US. The federal minimum wage rate
in the US, which remained at $5.15 per hour since 1998, increased to $5.85 per hour in 2008. It
further increased to $6.55 per hour in 2009 and to $7.25 per hour in 2010. Furthermore, many states
and municipalities in the country have minimum wage rate even higher than $7.25 per hour due to
higher cost of living. The minimum wage rate has increased in the states of Arizona (from $7.80 in
2013 to $7.90 in 2014), Colorado (from $7.78 in 2013 to $8 in 2014), Florida (from $7.79 in 2013 to
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SWOT Analysis
$7.93 in 2014), Ohio (from $7.85 in 2013 to $7.95 in 2014), Oregon (from $8.95 in 2013 to $9.10 in
2014) and Washington (from $9.19 in 2013 to $9.32 in 2014) in the recent past. Similarly, the minimum
wages in Europe have been rising steadily. According to Eurostat, the hourly labor costs in the euro
area and EU28 zone increased by 1% in the year up to the third quarter of 2013. Increase in labor
wages may increase the overall costs and affect the company's margins.
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Toys “R” Us, Inc.
Top Competitors
TOP COMPETITORS
The following companies are the major competitors of Toys “R” Us, Inc.
Target Corporation
Wal-Mart Stores, Inc.
Build-A-Bear Workshop, Inc
Amazon.com, Inc.
Argos Limited
Best Buy Co., Inc.
Bic Camera Inc.
El Corte Ingles, SA
GameStop Corp.
Sears Holdings Corporation
Mothercare plc
Auchan Group S.A.
Carrefour S.A.
King Jouet
Spiele Max AG
Yodobashi Camera Co.,Ltd.
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Toys “R” Us, Inc.
Company View
COMPANY VIEW
An excerpt from the 'Management's Discussion and Analysis of Financial Condition and Results of
Operations' section is given below. The statement has been taken from the company’s 10-K filing
for FY2013.
RESULTS OF OPERATIONS
Financial Performance
Net sales decreased by $366 million in fiscal 2012 compared to fiscal 2011. Foreign currency
translation decreased Net sales by approximately $133 million. Excluding the impact of foreign
currency translation, the decrease in Net sales was primarily due to a decrease in comparable store
net sales, partially offset by an increase in net sales from new locations within our International
segment, including stores acquired in the Labuan acquisition.
Gross margin, as a percentage of Net sales, increased by 0.9 percentage points in fiscal 2012
compared to fiscal 2011 primarily as a result of margin rate improvements across all categories and
improvements in sales mix away from lower margin products.
Selling, general and administrative expenses (“SG&A”) increased by $12 million in fiscal 2012
compared to fiscal 2011. Foreign currency translation decreased SG&A by approximately $43 million.
Excluding the impact of foreign currency translation, the increase in SG&A was primarily due to an
increase in expenses associated with Labuan and rent expense. These increases were partially
offset by a decrease in advertising and promotional expenses and credit card processing fees.
Net earnings attributable to Toys “R” Us, Inc. decreased by $111 million in fiscal 2012 compared to
fiscal 2011. The decrease in Net earnings attributable to Toys “R” Us, Inc. was primarily due to an
increase in Income tax expense and Interest expense, and a decrease in Gross margin dollars.
Comparable Store Net Sales
In computing comparable store net sales, we include stores that have been open for at least 56
weeks (1 year and 4 weeks) from their “soft” opening date. A soft opening is typically two weeks
prior to the grand opening. Express stores with a cumulative lease term of at least two years and
that have been open for at least 56 weeks from their “soft” opening date are also included in our
comparable store net sales computation.
Comparable stores include the following:
• stores that have been remodeled (including conversions) while remaining open;
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Company View
• stores that have been relocated and/or expanded to new buildings within the same trade area, in
which the new store opens at about the same time as the old store closes;
• stores that have expanded within their current locations; and
• sales from our Internet businesses.
By measuring the year-over-year sales of merchandise in the stores that have been open for a full
comparable 56 weeks or more and on-line, we can better gauge how the core store base and
e-commerce businesses are performing since comparable store net sales excludes the impact of
store openings and closings.
Various factors affect comparable store net sales, including the number of and timing of stores we
open, close, convert, relocate or expand, the number of transactions, the average transaction amount,
the general retail sales environment, current local and global economic conditions, consumer
preferences and buying trends, changes in sales mix among distribution channels, our ability to
efficiently source and distribute products, changes in our merchandise mix, competition, the timing
of the release of new merchandise and our promotional events, the success of marketing programs
and the cannibalization of existing store net sales by new stores. Among other things, weather
conditions can affect comparable store net sales because inclement weather may discourage travel
or require temporary store closures, thereby reducing customer traffic. These factors have caused
our comparable store net sales to fluctuate significantly in the past on a monthly, quarterly, and
annual basis and, as a result, we expect that comparable store net sales will continue to fluctuate
in the future.
Fiscal 2012 Compared to Fiscal 2011
Net Earnings Attributable to Toys “R” Us, Inc.
Net earnings attributable to Toys “R” Us, Inc. decreased by $111 million to $38 million in fiscal 2012,
compared to $149 million in fiscal 2011. The decrease in Net earnings attributable to Toys “R” Us,
Inc. was primarily related to an increase in Income tax expense of $54 million and an increase in
Interest expense of $38 million, which was predominantly due to the issuance of the $450 million
aggregate principal amount of 10.375% senior notes due fiscal 2017 (the “2017 Notes”) and the
repayment of the $400 million outstanding principal amount of our 7.875% senior notes due fiscal
2013 (the “2013 Notes”). Additionally contributing to the decrease in Net earnings attributable to
Toys “R” Us, Inc. was a decrease in Gross margin dollars of $19 million related to foreign currency
translation.
Net sales decreased by $366 million or 2.6%, to $13,543 million in fiscal 2012, compared to $13,909
million in fiscal 2011. The impact of foreign currency translation decreased Net sales in fiscal 2012
by approximately $133 million. Our reporting period for fiscal 2012 included 53 weeks compared to
52 weeks for fiscal 2011, which included an additional week of net sales of approximately $152
million.
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Toys “R” Us, Inc.
Company View
Excluding the impact of foreign currency translation, the decrease in Net sales for fiscal 2012 was
primarily due to a decrease in comparable store net sales. The decrease in comparable store net
sales was primarily driven by a decrease in the number of transactions, partially offset by higher
average transaction amounts within our Domestic segment. Additionally offsetting the decrease in
Net sales was an increase in net sales from new locations within our International segment, including
stores acquired in the Labuan acquisition.
Domestic
Net sales for the Domestic segment decreased by $244 million or 2.9%, to $8,149 million in fiscal
2012, compared to $8,393 million in fiscal 2011. The decrease in Net sales was primarily a result
of a decrease in comparable store net sales of 3.5%. Our reporting period for fiscal 2012 included
53 weeks compared to 52 weeks for fiscal 2011, which included an additional week of net sales of
approximately $95 million.
The decrease in comparable store net sales resulted primarily from decreases in our entertainment,
juvenile (including baby) and core toy categories. The decrease in our entertainment category was
primarily due to decreased sales of video game software and systems. The decrease in our juvenile
(including baby) category was predominantly due to decreased sales of apparel and furniture. The
decrease in our core toy category was primarily due to decreased sales of action vehicles.
International
Net sales for the International segment decreased by $122 million or 2.2%, to $5,394 million in fiscal
2012, compared to $5,516 million in fiscal 2011. Excluding a $133 million decrease in Net sales due
to foreign currency translation, International Net sales increased primarily as a result of an increase
in net sales from new locations, including stores acquired in the Labuan acquisition. Partially offsetting
this increase was a decrease in comparable store net sales of 5.0%. Our reporting period for fiscal
2012 included 53 weeks compared to 52 weeks for fiscal 2011, which included an additional week
of net sales of approximately $57 million.
The decrease in comparable store net sales resulted primarily from decreases in our core toy,
seasonal and entertainment categories. The decrease in our core toy category was primarily due to
decreased sales of action figures. The decrease in our seasonal category was predominantly due
to decreased sales of outdoor products. The decrease in our entertainment category was primarily
due to decreased sales of video game systems and software.
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Toys “R” Us, Inc.
Locations and Subsidiaries
LOCATIONS AND SUBSIDIARIES
Head Office
Toys “R” Us, Inc.
One Geoffrey Way
Wayne
New Jersey 07470 2030
USA
P:1 973 617 3500
http://www.toysrus.com/
Other Locations and Subsidiaries
Babies R US – New York
24-30 Union Square
East Manhattan
New York
New York 10003
USA
Toys R US – New York
Manhattan Mall
901 Avenue of the Americas
New York
New York 10001
USA
Babies R US – Pinedale
7370 North
Blackstone Road
Pinedale
California 93650
USA
Toys R US – Fresno
3520 West Shaw Avenue
Fresno
California 93711
USA
Babies R US – Toms River
1220 Hooper Avenue
Toms River
New Jersey 08753
USA
Toys R US – Freehold
600 Trotter Way
Freehold
New Jersey 07728
USA
Babies R US – Springfield
2601 Veterans Parkway
Springfield
Illinois 62704
USA
Toys R US – Springfield
2701 Veterans Parkway
Springfield
Illinois 62704
USA
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Toys “R” Us, Inc.
Locations and Subsidiaries
Babies R US – Westminster
9330 Sheridan Boulevard
Westminster
Colorado 80030
USA
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Toys R US – Applewood
Colorado Mills
14500 West Colfax Avenue
Applewood
Colorado 801401
USA
Page 31
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