A Comeback for Toys"R"Us

Facing Growing Competition, Store Takes New Approach

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Geoffrey store in Fond du Lac, Wisc.

Geoffrey store in Fond du Lac, Wisc. Jack Speer, NPR News hide caption

toggle caption Jack Speer, NPR News
Geoffrey stores feature Studio G, an area for kids' activities.

Geoffrey stores feature Studio G, an area for kids' activities. Jack Speer, NPR News hide caption

toggle caption Jack Speer, NPR News

Toys"R"Us, the nation's largest seller of toys behind Wal-Mart, has increasingly seen competitors encroaching on its core toy business. For its latest quarter, the company reported losses of $7 million. But as NPR's Jack Speer reports, under new leadership the company is fighting back, taking a page from the playbook of its competitors and expanding beyond just selling toys.

Toys"R"Us traces its roots back to the 1940s, when retailer Charles Lazarus began selling toys and baby furniture out of his father's bicycle shop in Washington, D.C. Since then it's evolved into a substantial player in the $20 billion-a-year toy business.

But as Wal-Mart and other competitors have grown, Toys"R"Us has seen its share of the toy market shrink. Jim Silver is the publisher of Toy Wishes, an industry trade publication. He says the fact that toy sales are seasonal has also prompted the company to expand beyond its core business with some new stores called Geoffrey, named after the company's giraffe mascot.

"Toys"R"Us needs to do something besides toys," Silver says, pointing to the apparel, birthday parties, footwear and hair salon that Geoffrey stores offer. The company must do something to bring people in during the first nine months of the year, he says. "To me the Geoffrey stores are the future of Toys"R"Us."

For Toys"R"Us, getting traffic through the company's stores throughout the year, and not just during the Christmas season, is a major goal and what the company hopes Geoffrey will do.

Joel Anderson, vice president for new ventures at Toys"R"Us, says since the first Geoffrey store opened in Fond du Lac, Wisc., the company has opened three others, also mostly in rural areas, where they can see how the stores do before expanding the concept further.

Compared to the company's other stores, the Geoffrey stores are different. They feature not just toys, but also clothing and other items from the companies Kids"R"Us and Babies"R"Us line. There's a learning center with educational toys, and an area called "Studio G" for kids activities. And at the store in Fond du Lac, they also do birthday parties and offer a video game section for older children.

But Toys"R"Us also faces an uphill battle. The company has cut nearly 1,000 jobs this year. Over the past several years, it has embarked on an ambitious remodeling of all of its 680 U.S. toy stores. Now it's retooling some of those stores again, making them Geoffrey stores.

By widening its selection of products and services Toys"R"Us hopes it will be able to bring more people into its stores more frequently. The company plans to open 15 more stores in four more cities, including San Antonio and Austin. The company says in a toy market that is rapidly fragmenting, it has little choice but to look beyond just being a seller of toys.



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