“Toys ‘Were’ Us?” Toys “R” Us hobbled by relentless price wars, lagging industry sales...
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“Toys ‘Were’ Us?” • Toys “R” Us hobbled by relentless price wars, lagging industry sales – Industry has transformed from fashion business driven by hottest new crazes to commodity market – Children migrating to electronic and computer games at earlier ages • Co was sold to private equity firms in 2005 – ~670 U.S. Toys “R” Us stores, 230 Babies “R” Us stores – Co closed its Kids “R” Us clothing stores in 2004
Transcript of “Toys ‘Were’ Us?” Toys “R” Us hobbled by relentless price wars, lagging industry sales...
“Toys ‘Were’ Us?”
• Toys “R” Us hobbled by relentless price wars, lagging industry sales– Industry has transformed from fashion business
driven by hottest new crazes to commodity market– Children migrating to electronic and computer
games at earlier ages• Co was sold to private equity firms in 2005
– ~670 U.S. Toys “R” Us stores, 230 Babies “R” Us stores
– Co closed its Kids “R” Us clothing stores in 2004
“Toys ‘Were’ Us?”
• Toys “R” Us was ‘category killer’ as recently as late ’80s, when U.S. market share was 25%– Forced Child World and Kiddie City into liquidation
• Wal-Mart became No. 1 toy retailer in 1998– Market share now ~25%, cf. 15% for Toys “R” Us– KB Toys and FAO filed for bankruptcy
“Toys ‘Were’ Us?”
• Wal-Mart is impacting multiple sectors– Today Wal-Mart is #1 retailer of consumer electronics
(pressuring Circuit City)– Blockbuster is struggling because Wal-Mart’s DVD
prices encourage purchase rather than rental– HBAs hurting drugstore chains– Groceries
• 25 regional chains have filed bankruptcy
• Wal-Mart and Target both targeting baby-products market w/ set-aside store section
» Source: Wall Street Journal, 8/12/04; Hoover’s Online
