Toys ``R'' Us seeks to separate toy, Babies ``R'' Us businesses
Wednesday, August 11th 2004, 10:49 am
By: News On 6
WAYNE, N.J. (AP) _ Toys ``R'' Us Inc. said Wednesday it is exploring the possible sale of its global toy business as it pursues separating its toy and baby product divisions.
The nation's second-biggest toy retailer behind Wal-Mart Stores Inc. said it will explore the possible sale of its worldwide toy business and the possible spinoff of Babies ``R'' Us. It also plans to begin a substantial restructuring of its toy business as part of an effort to dramatically reduce operating and capital expenses.
John Eyler, chairman and chief executive officer, said the global toy and Babies ``R'' Us businesses are at ``fundamentally different phases in their growth cycle,'' and separation would give the baby business more opportunity to continue its healthy growth.
``Whatever form the separation takes, these steps should facilitate the execution of a restructured _ and substantially leaner and more focused _ global toy business that we believe can generate significant cash,'' he said in a statement.
Toys ``R'' Us officials said they planned to ``substantially restructure'' the company's Wayne headquarters, but did not comment on whether that would include any layoffs.
Richard Markee, vice chairman of Toys ``R'' Us Inc. has been appointed president of Babies ``R'' Us and will become its CEO and president once the companies separate. Toys ``R'' Us Treasurer Jon Kimmins will become chief financial officer of Babies ``R'' Us, and John Barbour, currently president of Toys ``R'' Us International, will become president of U.S. toy stores.
Officials declined to answer questions about the news release, and said they would delay releasing their second quarter 2004 earnings until Aug. 23. The company had planned to release figures on Monday.
In November, the company announced it would be closing its 146 freestanding Kids ``R'' Us stores and its 36 Imaginarium specialty toy stores. The company's profit declined 48 percent in its fourth fiscal quarter earlier this year, which covered a disappointing holiday sales season.
The company said it was focusing on preparing its toy stores for the upcoming holiday season and did not expect to make a decision before then on any store closings.
``Customers should know that we will operate our toy business with renewed energy,'' Eyler said in the release.
Toys ``R'' Us has more than 1,200 stores worldwide with 683 toy stores in the United States, 579 international toy stores and 200 Babies ``R'' Us stores. It also sells through its Internet sites.