| Type | Privately held company |
|---|---|
| Industry | Retail |
| Founded | Rockville, Maryland (1948 as Childrens Supermart) 1957 (as Toys "R" Us) |
| Headquarters | Wayne, New Jersey, U.S. |
| Area served | Worldwide |
| Key people | Gerald L. Storch, Chairman and CEO |
| Products | Children's toys |
| Revenue | $13.646 billion USD (2007)[1] |
| Owner(s) | Kohlberg Kravis Roberts Bain Capital Partners LLC Vornado Realty Trust |
| Employees | 70,000 (123,000 during holidays) |
| Website | Toysrus.com |
Toys"R"Us (founded in 1948) is a toy and juvenile-products retailer headquartered in Wayne, New Jersey, United States. The company operates approximately 875 Toys “R” Us and Babies “R” Us stores in the United States, more than 600 international stores and over 140 licensed stores in 35 countries and jurisdictions. It controls the FAO Schwarz brand and operates its flagship store on Fifth Avenue in New York City. Toys "R" Us also operates a portfolio of e-commerce sites including Toysrus.com, Babiesrus.com, eToys.com and FAO.com.[2]
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Charles Lazarus initially started Children's Supermart (which would evolve into Toys "R" Us) in Washington, DC during the post-war baby boom era in 1948 as a baby-furniture retailer. Its first location was at 2461 18th St, NW, where the nightclub Madam's Organ Blues Bar is located. Lazarus began receiving requests from customers for baby toys. After adding baby toys, he got requests for toys for older children. The focus of the store changed in 1957, and Toys "R" Us was born in Rockville, Maryland. Toys "R" Us was acquired in 1966 by Interstate Department Stores, owner of the White Front, Topps and Children's Bargain Town USA, a sister toy-store chain to Toys "R" Us in the American Midwest that would later be re-branded as part of the Toys "R" Us chain. The original Toys "R" Us store design in the 1970s and 1980s consisted of vertical rainbow stripes and a brown roof with a front entrance and side exit.[3][4] Some brown-roof locations still exist, although some have been painted different colors or renovated.
To improve the company, the board of directors installed John Eyler (formerly of FAO Schwarz). Eyler launched an unsuccessful, expensive plan to remodel and re-launch the chain. Blaming market pressures (primarily competition from Wal-Mart and Target), Toys "R" Us considered splitting its toy and baby businesses. On July 21, 2005 a consortium of Bain Capital Partners LLC, Kohlberg Kravis Roberts & Co. (KKR) and Vornado Realty Trust invested $1.3 billion to complete a $6.6 billion leveraged buyout of the company. Public stock closed for the last time at $26.74—pennies from the 68-week high, but far short of its all-time high of almost $45 in fourth-quarter 1993 and its five-year high of $31 in 2Q 2001. Toys "R" Us is now a privately owned entity. However, the company still files with the Securities and Exchange Commission (as required by its debt agreements).[5] On May 28, 2010 Toys "R" Us filed with the SEC to raise up to $800 million in an initial public offering.[6]
With more than 60 years in the business and nearly 600 stores in the United States, Toys“R”Us is considered THE toy authority when it comes to finding an extensive assortment of new toys, old favorites, and great values for generations of parents and kids alike. From board games and video games to action figures or a child’s first LEGO® set, Toys“R”Us offers a broad selection of products for children of all ages at nearly every price point.
Toys“R”Us is often first-to-market on the hottest toys. In 2009, Toys“R”Us was credited for being the first to identify and carry the holiday season’s runaway hit – Zhu Zhu Pets. The company purchased a majority share in Zhu Zhu Pets, resulting in parents camping out in the parking lots of Toys“R”Us stores around the country just to purchase one of the fake hamsters.[8]
Toys“R”Us also carries thousands of exclusive toys that cannot be found at any other retailer. The retailer works on a regular basis to bring brands such as Calico Critters, previously available only at select small specialty toy stores, to the national stage, while other brands such as Tomica, a Japanese brand, were brought to the U.S. by the retailer for the first time during the 2010 Christmas season.[9] Additionally, the company routinely works with manufacturers to develop exclusive toy lines for its stores, such as the Disney Princess & Me line of dolls and accessories, which was introduced in 2010.[10]
Toys“R”Us also carries a large selection of educational and learning toys, anchored by its Imaginarium brand, which was purchased by the company in 1998.
In 1983, the company introduced Kids“R”Us, dedicated children’s clothing stores, in Paramus, New Jersey and Brooklyn, New York. In 1996, the company added apparel to most of its Toys“R”Us stores across the country, and closed its freestanding Kids“R”Us stores in 2003.
Formerly known as Dr. G. Raffe, the company’s mascot Geoffrey the Giraffe made his debut during the 1950s in print advertisements for Children’s Bargain Town. He was known for saying “Toys are us,” a quote that paved the way for the company. During the 1960s, when Children’s Bargain Town became Toys “R” Us, Dr. G. Raffe was renamed Geoffrey and became the official Toys“R”Us “spokesanimal”. As the company evolved, so did Geoffrey.
The first Babies“R”Us location opened in 1996 in Westbury, New York. Today, Babies“R”Us operates as a specialty baby products retailer and has grown to approximately 260 locations across the country since its first store opened. The stores offers new and expectant parents a broad assortment of products for newborns and infants, including cribs and furniture, car seats, strollers, formula, diapers, bedding, clothing and toys. Its popular Babies“R”Us Registry has been used by more than 11 million moms to date.
In addition to its expansion in the United States, Toys“R”Us launched a worldwide presence in 1984 when the company opened its first international wholly owned store in Canada and licensed operation in Singapore. Toys“R”Us, International currently operates more than 600 international stores and over 140 licensed stores in 35 countries and jurisdictions outside the United States, including Australia, Philippines, Canada, The Netherlands, Germany, Portugal, Spain and the United Kingdom, among others. The company continues to grow internationally, and made its most recent entry into a new market in October 2011 when it opened its first licensed location in Poland.
In 2009, Toys“R”Us purchased remaining shares of Toys“R”Us, Japan from McDonald's Holdings Co., increasing its ownership from approximately 62% to slightly over 90%.
Toys“R”Us, Inc., in May 2009, acquired iconic toy retailer, FAO Schwarz, in May 2009, and currently operates the retailer’s famous flagship store on Fifth Avenue in New York City, as well as its e-commerce site, FAO.com. [11]
During the 2010 holiday season, Toys“R”Us, Inc. developed a rebranding strategy for FAO Schwarz inclusive of a new a new logo that includes an image of a sprite-like creature the company has dubbed "Wit." In addition, the company put FAO-branded merchandise in Toys“R”Us and Babies“R”Us stores, while keeping the high-end specialty toy brands that can't be sold at mass market at the FAO Schwarz store and on the FAO.com website.[12]
Toys“R”Us launched Toysrus.com in June 1998. Number 37 in the Internet Retailer Top 500 Guide, Toysrus.com is one of the most visited sites in the specialty toy and baby products retail category with a vast assortment of toys for kids of all ages. In addition, Babiesrus.com offers a wide selection of baby products and supplies and access to the company’s baby registry.
Looking to expand its web portfolio, in February 2009, the company acquired online toy seller eToys.com from Parent Co., which filed for bankruptcy protection in December 2008. Financial terms weren't disclosed. [13]Around the same time, it was reported that Toys“R”Us, Inc. bought Toys.com for an estimated $5.1 million. Today, the company operates Toys.com to list unadvertised and exclusive deals available on its portfolio of e-commerce sites. [14]
In 2010, Toys“R”Us, Inc. reported that its Internet sales grew 29.9% year-over-year to $782 million from $602 million, and in April 2011, the company announced plans to open a dedicated e-commerce fulfillment center in McCarran, NV.[15]
For the 2009 holiday-shopping season, Toys "R" Us tried a smaller-store concept to attract customers and 90 "Holiday Express" stores across the United States and Canada were opened.[16] The Holiday Express stores are smaller than regular Toys "R" Us locations, often located in malls, and offer a more limited selection of merchandise than would be available at a stand-alone Toys "R" Us store. Most (if not all) of these 90 stores were opened in shopping-center and mall spaces that had been vacated by store chains closing their doors during the recession (including KB Toys, several of which were taken over by Toys "R" Us).[16] Toys "R" Us' original plan was to keep the Holiday Express stores open until early January 2010 and close them shortly thereafter, but the success of many prompted the company to reconsider and several were kept open.[17] These stores are known as "Toys "R" Us Express". Beginning in June 2010, Toys "R" Us opened a total of 600 Express locations nationwide. In addition to those 600 stores, four Express locations were converted to Toys "R" Us outlet stores.[18]
In June 2010, Toys“R”Us opened a sourcing office in Shenzhen, China, with a staff of about 100 people, allowing the retailer to deal directly with factories in China and elsewhere to develop its own apparel, sporting goods, furniture, and toys for its Toys“R”Us and Babies“R”Us stores. It has been reported that the office is the latest move by the retailer to support its growing exclusive, private-label portfolio of products. In conjunction with International Toy Fair in New York in 2011, the retailer introduced a line of wooden cars and play sets based on the Disney movie “Cars” that was developed and designed by Toys“R”Us in partnership with Disney Consumer Products and sold only at Toys“R”Us stores nationwide and online at Toysrus.com.[19]
During the 2010 holiday season, Toys“R”Us introduced its own line of 18” dolls, Journey Girls. Each doll comes with a back story describing its travel experiences and hobbies. Taryn is a musician who dreams of playing at the New Orleans Jazz Festival; Meredith is a skier who hopes to visit the Alps.[20]
The company also sells a line of baby essentials, including powdered infant formulas, diapers, wipes, laundry detergent and purified water, marketed under the Babies“R”Us brand name.[21]
Toys “R” Us has taken a leadership position on toy and baby-product safety, beginning in 2007 when millions of toys from China were recalled for high lead levels. The company has reportedly implemented high safety standards, and in 2007 vowed to take an aggressive approach towards holding vendors accountable for meeting those standards.[22] Chairman and CEO Gerald Storch, testifying before a Senate appropriations subcommittee on toy safety in September 2007, said he supported new legislation strengthening toy-safety standards and outlined new initiatives the retailer had set forth to ensure that its customers receive timely information on recalls (including a new website).[23][24]
In 2008, the company introduced stricter product safety standards exceeding federal requirements. Among the new standards was a requirement for materials inside toys to meet a standard of 250 parts per million of lead for all products manufactured exclusively for the retailer (compared with the federal standard of 600 ppm.) Toys “R” Us also announced the requirement that baby products be produced without the addition of phthalates, which have raised concerns about infant safety.[25] The company has since adjusted its requirements to meet new federal standards enacted with the Consumer Product Safety Improvement Act (CPSIA).
In addition to toy safety, the company also took steps to stop selling drop-side cribs before it became a federal requirement. In fall 2010, after the U.S. Consumer Product Safety Commission (CPSC) and Food and U.S. Drug Administration (FDA) issued a joint warning advising parents to stop using sleep positioners, Toys “R” Us removed sleep positioners from its in-store and online inventory throughout North America.[26]
The Toys“R”Us Children’s Fund, a public charity affiliated with Toys“R”Us, Inc. founded in 1992, supports various children’s organizations, including those providing disaster relief to children and families who are victims of large-scale crises. The Fund also provides grants to leading organizations that support children with special needs. In addition to financial and product donations, company stores host multiple in-store fundraising campaigns annually.[27]
Since 2004, Toys“R”Us, Inc. has raised over $23.6 million and collected 3 million toys during the holiday season to support the Marine Toys for Tots Foundation. Cash and toy donations are collected in all Toys“R”Us and Babies“R”Us stores nationwide, and monetary donations are also accepted online.
During times of disaster, Toys“R”Us, Inc. and the Toys“R”Us Children’s Fund together have provided product and monetary donations specifically to aid in Save the Children’s efforts to help protect children, ensure their safety in shelters and at community recovery sites and support their emotional recovery during times of disaster. Financial support totaling more than $3.5 million has been donated. In 2010, Toys“R”Us, Inc. received the Corporate Recognition for Humanitarian Assistance honor for its disaster response work with Save the Children from InterAction, a coalition of U.S.-based international nongovernmental organizations focused on the world’s poorest and most vulnerable people.
Toys“R”Us, Inc. also works with Kids in Distressed Situations (K.I.D.S.) to help provide products in the wake of natural or other crises.
Toys“R”Us, Inc. has a long history of supporting the special needs community. Each year since 1994, the company has published the Toys“R”Us Toy Guide for Differently-Abled Kids, a resource featuring specially selected toys that aid in the development of children with physical, cognitive or developmental disabilities. In 2011, Eva Longoria volunteered to be featured on the cover. She joins a long roster of recognizable personalities in the country who have served as the “face” of the Guide, including Holly Robinson Peete, Meredith Vieira, Maria Shriver, John Ritter, Whoopi Goldberg and Marlee Matlin. In addition, Toys“R”Us, Inc. has partnered with Autism Speaks since 2007, and since then, Autism Speaks has received more than $12 million through money raised during the Toys“R”Us, Inc. in-store and online fundraising campaigns and through donations from the Toys“R”Us Children’s Fund and Toys“R”Us, Inc. Also, Toys“R”Us, Inc. employees nationwide participate in the Walk Now for Autism Speaks program.
On April 11, 2011, Toys "R" Us announced that it plans to cover 70 percent of the roof of its distribution center (located in Flanders, New Jersey) with a solar installation. The company claims this 5.38-megawatt solar project will be the largest rooftop solar installation in North America.[28]
On August 23, 2011, Toys“R”Us Inc. announced it would open 21 new stores before year’s end, as part of an overall strategy the company has been pursuing since 2006 to house Toys“R”Us and Babies“R”Us in the same building. The company says the stores provide more shopper convenience. The privately held toy company said this will include 11 "R" Superstores - which have full-size Toys“R”Us and Babies“R”Us stores in one location - and 10 stores that will have smaller Toys“R”Us and Babies“R”Us stores in the same location. The stores will be in 13 states including Alabama, California, Texas and New Jersey. It is also remodeling 23 existing stores so that the two stores will be in the same location.[29]
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