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‘R’ Superstore puts Toys ‘R’ Us back on map


SECAUCUS, N.J. —Hearing Toys “R” Us chairman and ceo Jerry Storch speak of the good old days when the company once known as Children’s Bargain Town built its empire on the strength of its juvenile products offerings, it’s no wonder that he now speaks of baby goods as the lynchpin to both present and future success.

Following a 12-year experiment with stand-alone Babies “R” Us stores—in which juvenile product was removed, in essence, from U.S. toy stores—the new direction being implemented by Storch is all about merging. Merging merchandise, merging buying responsibilities and most notably, merging store concepts.

A recent walk-through of the company’s newest “R” Superstore prototype in Secaucus, N.J., a 65,000-square-foot combo store that brings together a full-line baby goods store with a full-line toy store, illustrates just how significant the merging idea is going to be at the store level. “[This new prototype] represents the highest state of evolution of our strategic thinking,” Storch said. “We’ve been working on bringing the [Toys “R” Us and Babies “R” Us] brands back together and recapturing the strength of the original days of the company.”

The facade of the new structure (retrofitted from an existing, defunct strip mall) is the first clue to consumers of the direction of the new “R” strategy. Two large storefront signs of equal size, one for Toys “R” Us, the other for Babies “R” Us, communicate more than just the combination of two retail concepts. Each serves as a separate entrance to two distinctly different shopping experiences.

And although the store itself is designed as a single open space—with clean sightlines extending clear across the floor and a joint checkout area front and center—by design, the store allows the consumer to interact with each “store” independent of the other.

“It’s an efficient concept and we see significant potential around the country for this,” said Storch. “The build-out opportunity is hundreds of stores.”

This talk of an aggressive rollout may be more than just wishful thinking, too. Even in the face of a less-than-cooperative economy, Toys “R” Us has devised what it believes is a winning growth formula that boils down to one simple idea: Less is more. By combining what Storch refers to as an “aged” toy store that “doesn’t look so good” with another toy or baby store in the same market, the company can realize comparable-store sales efficiencies with fewer physical locations.

The crown-jewel market of Storch’s less-is-more approach is none other than Jacksonville, Fla., the chairman’s home town, where the company has pulled off the equivalent of a retailing trifecta. Three stores, two toy stores and one baby store, were relocated and combined into one, which, in the process, produced better financial results than the sum of all three.

While such a “three-for-one” admittedly is an anomaly, Storch says there are many examples, in many markets, where two stores—most likely two toy stores—can be merged into one “R” superstore, all the while gaining in efficiency. “Instead of two stores of 40,000 to 45,000 square feet each, we accomplish the same thing, with all the same assortment…in 64,000 to 75,000 square feet, because we have common registers and a common back room,” said Storch. “Plus, we don’t duplicate the merchandise categories.”

As for the immediate future of the “R” superstore concept—which currently stands at 19 units, with plans, albeit tepid, to continue growing in 2009—the economy is forcing the company’s hand. Instead of aggressively pursuing conversions and new growth next year, the company has adopted a go-with-the-flow mentality, whereby the pace of development and its ability to secure creative solutions will, in essence, dictate just how many new “R” stores will be up and running by this time next year.

“Along with all the disrupts and all the pain that we’re going to see this year and maybe next year, I think we’re going to see a total revolution in creativity in real estate going forward,” said Storch.

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