Toys R Us Chief Executive Gerald L. Storch has visited 15 stores in the last week, where he watched kids carrying around dog-eared copies of the chain's "Biggest Toy Book Ever!," looking for the scary-looking $140 Imaginext Spike remote-control dinosaur and the very real-looking $80 night vision goggles. "The military pays $1,000 for theirs," he points out. He hopes to sell a lot of these "quality toys that offer good value" on Black Friday. Watching the action at the Toys R Us megastore in Times Square, with its 60-foot Ferris wheel, life-size Barbie house and New York skyline constructed of Legos, Storch is convinced: "Toys are the last thing parents are going to cut from their budget." But will they buy them at Toys R Us orWal-Mart Toys R Us, with a 16% share, has already held a few weekend door-buster sales this autumn. On Black Friday, it's offering half-off "Guitar Hero III: Legends of Rock" and Barbie Princess dolls. The price cuts keep coming. For most retailers, this will be a Christmas only the Grinch--or Wal-Mart--could love. By almost every measure, holiday shoppers will buy less than last year. There will be fewer of them shopping this weekend--5% less than last year, according to a National Retail Federation survey this week. Even online sales will at best be flat, Comscore, the Reston, Va., Internet-tracking firm, predicted on Tuesday, ending years of solid double-digit growth. For the first 23 days of November, they are down 4%. Almost half of shoppers surveyed last weekend plan to buy fewer gifts and spend less this year than last. The holidays will be spent in bankruptcy court for Mervyns, Linens 'N Things and a growing number of retailers with close-out sales. There is a lot riding on this holiday shopping season for Toys R Us. The chain books 75%-80% of its net income in the fourth quarter. Even electronics and specialty apparel retailers who count on the holidays for their best sales ring up a more modest 50% of earnings during that time. That percentage would be higher, as it is for Pier One Imports and Circuit City It is called Black Friday because, for many shops, it's when their books turn from red to black for the year. In the first half of the year, which ends Aug. 2 for Toys R Us, the company lost an estimated $108 million--about $4 million a day. Sales improved in the second quarter, but it's likely those gains were wiped out in the third quarter.
Retail
Black Friday At Toys R Us
Deborah Orr, 11.27.08, 12:00 PM ESTA lot is riding on this holiday shopping season for the toy retailer and rivals Wal-Mart and Target.
Thursday, 27 November 2008
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