Thursday, January 7, 2010

Best Toy Retailer of 2009 - TRU

Toys-R-Us has good reason to celebrate the 2009 Holiday shopping season. The company released their December 2009 financials today and despite difficult economic challenges in the marketplace, they had a very positive December.

WAYNE, N.J.--(BUSINESS WIRE)--January 07, 2010-- Today, Toys"R"Us, Inc., the world's leading dedicated toy and baby products retailer, announced its comparable store sales for the month of December and the 2009 holiday selling season.

For the month of December, the Toys"R"Us, Inc. Domestic division reported a comparable store sales increase of 4.6%, while the International division reported a comparable store sales increase of 1.1%.

"We are very pleased with our December results, which reflect the successful execution of our overall strategy for the holiday selling period," said Jerry Storch, Chairman and CEO, Toys"R"Us, Inc. "This strategy focused on our breadth of product assortment, including the hottest toys, a commitment to quality products, providing good value, and offering expert service. Our toy authority position was clear, as consumers turned to us in increasing numbers for their toy buying needs this holiday season."

We watched the marketing of the major retailers closely over the 2009 shopping season and could tell TRU had finally put a very solid game plan together to compete against the likes of Wal-Mart and Target. They had it all covered.

* Competitive pricing out of the gates starting in October linked with strong marketing that never let up with compelling circular and television ads.

* Strong inventory control, finally! This is where TRU had the most difficulty over its history and just had too much of everything. This year, they planned ahead by backing off on lines that are lower in demand while pumping up the sure fire brands such as Lego. TRU was the only major retailer left with decent Lego selection still on shelf late in December. Both Target and Wal-Mart were completely wiped out by then.

* Their buyers displayed insight early when they were the only major retailer that bought into the Zhu Zhu Pets toy line. They then artfully capitalized on it all season with free press as it turned into 2009's hottest toy of the Holiday season. All other retailers played "follow the leader" on this one.

* Video Games, Video Games, Video Games. This is the gift leader that puts traffic in your store in November and December and TRU had some of the best video game deals every single week of the season. Practically every kid out there has some sort of game console (or wants one) and develops a game or accessory want list for Christmas. This is one retailer that knows how to capitalize on this need.

* TRU took a risk and aggressively expanded by opening roughly 80 temporary pop-up holiday stores in shopping malls and about 260 temporary toy stores within Babies-R-Us locations nationwide.

As a hardcore toy guy, I'm very happy for TRU and extremely pleased to see they pulled it off. This is a retailer that has struggled from time to time over the years and made very bad decisions that nearly closed its doors at one point. They have made quite a strong comeback over the past two years. Thanks in part to the leadership of Jerry Storch (A former Target leader).

Of course they still have some work to do with managing their inventory and the buyers need to be better at recognizing when to bail out of poorly selling licenses (Star Trek and Hulk come to mind). But it's absolutely vital to the health and diversity of the toy industry that the world's largest toy retailer remain strong and can compete against the big two. You can imagine how bad it would be for an entire industry if it had to shrink down its offerings to fit into a handful of aisles at a Wal-Mart, Target or even a K-Mart.

We can imagine some serious celebrating going on in Wayne NJ this week. Much deserved.

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