[TennTags]

O/T TRU - Keep the babies and get rid of the toys...

Anyone else hear about this?



http://www.thestreet.com/_tscana/markets/meredithderby/10177695.html



Analysts had a mixed reaction to news Wednesday that besieged toy retailer Toys R Us (TOY:NYSE - news - research) will hive off its Babies R Us unit and restructure its global toy operations in an effort possibly to sell them.

The Wayne, N.J., chain, which has been struggling with waning sales in the increasingly competitive toy sector, hopes to reduce operating expenses in its corporate headquarters and U.S. toy business by more than $125 million in 2005, compared with 2003. It also wants to cut capital spending in the global toy business to less than half its annual depreciation and amortization expense, which stands at about $300 million.

The company will take about $150 million in second-quarter markdowns to liquidate toy store inventory and about $14 million in severance charges in the quarter related to the restructuring of its headquarters.

"It looks as if Toys R Us management reviewed results during June and July and are throwing in the diaper," said Richard Hastings, retail sector analyst at Bernard Sands. "The news release is somewhat confusing -- it sounds like the entire enterprise is up for grabs.

"There are certainly some ominous warnings in here: the markdowns, the severance payments, and the huge cut in spending all represent typical late-phase issues."

Shares of the company were lately down 35 cents, or 2.1%, at $16.07.

Another analyst called the news a huge positive for investors. "One of the critical pieces to unlocking shareholder value in Toys R Us is separating its crown jewel, Babies R Us," said Prudential Equity analyst Mark Rowen in a research note.

The company's strategic review was designed in part to address its waning core U.S. toy business. The company has not said when the review will be completed but said in March that it is taking longer than it thought to finish. Toys R Us' waning sales have been a byproduct of discounter Wal-Mart's (WMT:NYSE - news - research) aggressive toy pricing. The company said in March that the upcoming 2004 holiday season will be a critical time for it to maintain its competitive edge.

 

[DS]

Yep, looks like the beginning of the end for old TRU.

 

[rlyoung1]

I'm sure Sam Walton's spirit is dancing.

 

[dammitman]

maybe they should contact RC2,,,,they could use the place for sure,,,,,,

 

[T/A Tom]

After the raw deal I got at ours I could care less if they go under. The person that manages our store may be looking for a new job soon it would seem.

 

[noddaz]

Hmmm...
Just how many people are going to lose their jobs over this?
There is really nothing here to be happy about...
Scott

 

[Pony]

I used to work for TRU and still know a lot of people that do. I do feel bad for them. Of course some of the people that are still there I can't stand and I'll laugh in thier faces when they're in the unemployment line.

Gotta stop and think though, what happens when Wal-Mart is the only game in town to get your toys?I used to work at WM too and they send people out to comp shop, making sure theier price is a few cents lower. TRU was the only one who we ever had to keep an eye on. So when they're gone Wal-Mart will only have to watch K-B and K-Mart. Looks to me like they can raise thier prices. (BTW K-B 3/$5.00 doesn't count because it's considered a sale price.)

 

[Captain Fred]

Many people have already been loosing their jobs. TRU laid off many employes a little over one and a half years ago. I was surprised that I didn't get the axe at that time, considering that I was one of the higher paid emplees in my store.
Management turnover has been pretty high in the last few years. I've been surprised that we've been able to make any money at all.

They tell us how important customer service is, yet they schedule maybe 2 people on the sales floor, one helping to cover customer pickup and the other a backup checker. What do you think happens when someone calls out or needs to take a lunch?

The managers purposely short staff the store to save on payroll, then scratch their heads and wonder why guest delight scores suck. From what I've been told, if the managers come in under budget, they get bonuses. Hmmm.....

With the lack of floor coverage, theft is rampant. People rip toys out of the boxes because they think TRU is this big happy place where you can go in and just play with all of the toys. Once stuff is opened, no one wants it because they are afraid it was a return or that pieces are missing. Sometimes we spend more time cleaning up and answering the phone, instead of helping guests.

Speaking of used & damaged merchandise, sometimes they accept returns that have been used, abused or have pieces missing. They have even accepted things from other stores that still have the other stores' labels on them.

I could tell you some stories!

 

[kymailman]

Hmmm.....couldn't happen to a nicer outfit. Serve's them right. They've been screwing the consumer for so long now. You think maybe they would try simple economic's; like LOWERING THE PRICES! Nope, that almighty "buck" for a Hot Wheel car is much TOO important to do that than to keep your customers coming back or keep your employee's from going through the damn case's before the customers get a chance to see what is in them. I would be thrilled to see them go by the way side - maybe Mattel would wake up and quit SUCKING up to them!

 

[Wyatt]

Sucks for a lot of people, but does anyone remember that website a while back talking about how corrupt they were? Maybe it serves them right.

and by the way, like I said, maybe Tom Lowe wasn't so dumb selling PM when he did. TRU bought a lot of JL stuff, didn't they? Wal-Mart and Target are so slim on JL stuff now that it's a waste of time to go there any more frequent than once every 3 months. Now, I have a local Hobby Lobby that says they are not getting in any more JL stuff, but can't confirm that. If all this is happening, what retail store is buying the JL stuff? Hobby stores that charge $5-$8 per car? I hate to sound so pessimistic, but looks like things are not going a good way for diecast toys.

 

[CTWLSMIKE]

I wouldn't be sorry to see them go. I just hope lots of fast food restaurants are hiring because lots of those employees might actually end up at stores we like to shop at. Hope they get any good ones that there are!

 

[RobDog]

...just a matter of time and WM will be writing thier own ticket on diecast (ect)prices....

 

[johnsreflex]

I wont miss..

them at all. I rarely have had any luc there over the years. Not too friendly as well.

 

[Martyg]

That would SUCK! I do the best at TRU.
Marty

 

[chadms]

i wouldn't miss them either.

 

[Inciteful]

From what I read, I thought that TRU might be for sale. At least the "Toys" part of R' Us that is. I'm surprised that HL and Hobbytown for that matter are still a float...

 

[vw-wl-collector]

tru sucks ill love to see it close i cant wait ill be there flipping off the scalper employees and laughing if it goes under

 

[CTWLSMIKE]

From the looks of their selection at times it looks like they already quit the toy business some time ago!

 

[b_bodylover]

Another victim of WalMart is not a good thing no matter what store chain it is. They have even put supplying companies out of business. Wallys has become so big, that they dictate what they will pay to a supplier for certain items, and if this is not met Wallys has ALL of that companies products removed from their stores. In trying to meet these terms of extortion, a lot of these companies actually go bankrupt, or are operating very near to it. I remember reading an article, a few years ago, I wish I could remember what magazine it was, it was during one of my frequent doctors visits though, about this very thing going on with the nations biggest producer of pickles, Vlasic. The article also stated other examples but I can no longer recall what companies they were. It was an eye opening read none the less. And all this time I thought we had laws, in this great country of ours, against monopolys. It sure seems WalMart has established itself well towards this goal.

 

[nascar4al]

I would hate to see them go out, I find alot of WLs, hunts, and zamacs at TRU, the employees dont take the stuff around here. too many people losing their jobs now. I sell 1:1 cars and laid off people dont buy cars.