Retail Toys R Us

Presented by: MMS 08 - 10 Pushkar Jadhav -

14

Mayank Lalpuria - 22 Anand Padwal - 32 Mandar Patil - 37

Company Background • The two main Strategies of Toy “R” Us are : -Every day low price (EDLP) -Keeping Toys in stock • Faster expansion & increase in market share • Change in management

Company Background • Conversion of Toy ‘R’ Us stores into Babies ‘R’ Us • Expansion of babies ‘R’ Us stores and its product line • Decrease in profit of Toy ‘R’ Us in last three years

International Expansion • In 1983 TRU entered the children’s clothing market with Kids “R” Us and established the International Division. • The first international store opened in 1984 in Canada. from 1986 - 94, TRU was in Singapore, Hong Kong, United Kingdom, Germany, France, Taiwan and The franchise division also led to the entry of TRU to Israel, Saudi Arabia,

• TRU used its established relationships with toy suppliers and knowledge of toy trends to quickly stock stores with attractive new merchandise. • TRU sells a version of Monopoly in Hong Kong that replaces Boardwalk” and “Park Place” with “Sheko” and “Repulse Bay.

• TRU tried “store within a store” or “boutique” concepts. e.g. Lego Stores

The Toy Business • The toy industry annually generates sales of $25 billion at retail in 1990s. • Market Share is U.S. 40% , Europe 30%, and Asia 30% in the 2002-2003. • Everyone in the toy business is constantly looking for hits. • Parents pay close attention to the safety of toys • High-demand Christmas buying season • When characters on children’s television or movies become successful, a company license its name, character, or logo, to yield even more revenue.

Market Dominance • As of 2005, the TRU organization included 685 toy stores in the U.S. and 603 international toy stores • TRU had set up its own Internet site in 1998, trying to catch up to the new toy-selling trends. • In 2001, TRU developed an arrangement to merge its toy merchandising website with that of Amazon.com. • By 2004, the TRU share of the US toy business had fallen to 17 as Walmart and others were catching more than 20% Market Share.

2003 - The Toy Market Decline Company

2002 Toys sales in million $

2003 Toys sales in million $

%Change

Wal-Mart

$8,500

$9,435

11.0%

Toys R Us

$6,615

$6,345

-4.1%

KB Toys

$2,060

$1,650

-19.9%

Target

$2,250

$2,530

12.4%

Kmart

$1,700

$1,345

-20.9%

A Full Stop to Imaginarium

Learning and educational toys

TRU Japan Stake reduced from 80% to 48%

The Changing Market Toy Category Action Figures & Accessories Building Sets Dolls Infant/Presc hool

Annual Sales Annual Sales 2002 2003

%Change

$1.4B

$1.2B

-14.6

$766M

$625M

-18.4

$2.7B

$2.8B

3.5

$2.9B

$2.6B

-11.7

The New Choice of Kids

Christmas, 2004 Competing with Discounters

TRU : “We have to do the things Wal-Mart and Target won’t do, or can’t do.”

The Strategy • 300 different private label toys. • Worked closely with both small and large vendors. • Sales of Private label products went up from 5% to 20%. • The ‘TOY BOX’

The Brink • Revamped store operations - Executives trained to indulge in customer care -Acquisition of exclusive toys Eg. Mattel’s Hokey pokey • Ad campaign -30 sec 60 sec slots in New York and Los Angeles

Revival Attempt • Re-order with vendors for Hit toys -eg. Acquadoodle, Hair Fairy tale • Defined objectives to conduct business - Not to compete with Wall mart but to equate prices -Keep Heavy stocks of hit items

The end ? • TRU’s failing attempts • The sales debacle • Attempt to modernize.