Toys “R” Us sales are up—a little—for the first time in six years, thanks to aggressive merchandising and customer service improvements.
The toy chain plans to build on that with a hefty investment in expansion, and further upgrades in merchandising, including more exclusive products and fewer out-of-stocks.
Total sales rose 15% to $13.05 billion for the fiscal year ended Feb. 3, Toys “R” Us reports. That includes Toys “R” Us and Babies “R” Us stores worldwide, with 48 new stores across two divisions, Babies “R” Us (now 232 stores) and International (488 stores). The company’s performance was strongest overseas: Sales for Toys-Japan alone jumped $1.65 billion.
But in the U.S., the flagship Toys “R” Us chain is still struggling. Same-store sales were up only a slight 0.6% for the year, but up 3.7% for the crucial fourth-quarter holiday season, the company reports. The chain’s net sales fell 8.4% to $5.89 billion for the fiscal year, mostly because it closed 85 stores early last year.
Chief Executive Officer Jerry Storch credits the overall sales bump on vigorous housecleaning in the stores themselves.
“Key to our strategy has been improving the customer shopping experience in our stores,” Storch said in a statement. “We are accomplishing this by delivering a more compelling merchandise selection, better service, and a cleaner and more comfortable shopping environment.”
Store-level improvement continues to be the top priority.
“We have increased our fiscal 2007 capital budget significantly over 2006 to support further store expansion and to continue to execute strategic improvements in our baby and juvenile merchandising,” Storch said. “We remain committed to delivering excellent customer service by being in-stock with the items our customers want at competitive prices and by differentiating our product assortment through key items and exclusive offerings.”
Toys “R” Us spent $91.2 million on measured advertising last year, according to TNS Media Intelligence.
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