ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, September 29, 1996 TAG: 9609270019
SECTION: BUSINESS PAGE: 1 EDITION: METRO
DATELINE: PARAMUS, N.J.
SOURCE: JOYCE M. ROSENBERG Associated Press
BRIGHTER AND BIGGER STORES and a streamlined inventory are just part of the plan for making the toy giant more "shoppable" in the future.
Perhaps the greatest gift Toys `R' Us Inc. got for Christmas 1994 was the gift of foresight. The big toy retailer realized it needed to make some changes.
``It was a pretty good year, but we didn't like the feel of what was going on,'' said Michael Goldstein, the company's chief executive officer.
Competitors like Baby Superstore, Wal-Mart and Kmart were taking business away. Toys `R' Us stores were beginning to look tired. So the company began laying plans to remake itself.
It was just as well, because last year turned out to be bumpy. As Toys `R' Us told shareholders in its annual report, ``the 1995 holiday selling season was particularly difficult.''
For the fiscal year ended Feb. 3, Toys `R' Us reported profits of $148 million, down from $532 million the year before, despite sales growing to $9.43 billion from $8.75 billion a year earlier.
Now, with another Christmas season approaching, the company expects to do better, partly because of a restructuring that included the development of two new store formats - a revamped toy store, and Babies `R' Us, a superstore for infant merchandise - and a streamlining of its bloated inventory.
Concept 2000 is the company's code name for the Toys `R' Us stores of the future. The first is actually a remodeled Toys `R' Us in Raritan, N.J., completed in mid-July.
In the parking lot, shoppers see a store with a glass front instead of brick, making the toys visible from outside, and giving the building a lighter feel.
Inside, the aisles have been reconfigured to make the store more spacious and less like a warehouse. Signs help shoppers see which toys are in which aisle. Cheerful displays similar to those in stores such as F.A.O. Schwarz brighten the ambience. There's merchandise that shoppers aren't accustomed to seeing at Toys `R' Us, such as a big display of Gund plush toys.
A typical Toys `R' Us has about 45,000 square feet, although some stores in smaller markets measure 20,000 or 30,000 square feet. Concept 2000 is intended for bigger stores - the company plans to slowly renovate many of its other 650 stores. Every new store will be built according to the new design.
Results at the first Concept 2000 store are good, Goldstein said during an interview in the company's Paramus headquarters. He rapped his knuckles on the table for luck.
The changes have received favorable reviews among analysts.
``The format is much more forward-thinking. It moves Toys `R' Us to the consumer of today,'' said Jeffrey Feiner, an analyst with Salomon Brothers Inc.
But Feiner also noted it's too soon to know how fast changes can be made to the other Toys `R' Us stores. The company has said it expects to complete about 20 Concept 2000 stores this year, including four renovations.
The company has revamped its inventory focus, reducing the number of items carried, and has been running clearance sales to eliminate slower-moving merchandise.
Goldstein said the changes will ``reduce assortments to make the stores more shoppable.'' Moreover, they mean Toys `R' Us will have money and floor space to reach niche markets, such as adults who collect higher-end toys such as $100 Barbie dolls.
As part of the inventory streamlining, Toys `R' Us won't necessarily stock every single version when manufacturers start cloning rivals' products. Goldstein noted that after the toymaker Little Tykes introduced its Cozy Coupe car, other companies mimicked the design, and Toys `R' Us carried eight different models. Several didn't sell well. Now the chain will carry only three or four.
The first Babies `R' Us store opened on Long Island in May. The store is a broad expansion of the infants' departments in Toys `R' Us stores, and the company's Kids `R' Us clothing chain. The company expects to have 10 Babies `R' Us stores open by year-end.
In October, the company expects to open its first superstore, which will encompass Concept 2000, Kids `R' Us and Babies `R' Us.
LENGTH: Medium: 83 lines ILLUSTRATION: PHOTO: AP. Maria Wierzba helps her son, Chris, try out a toyby CNBcar at the remodeled Toys 'R' Us store in Raritan, N.J. The store is
the first with the company's new format. color.