Barnes & Noble tests toy boutiques

New York City A report released Thursday said that Barnes & Noble has launched a test of store-in-store toy boutiques at a few select locations, in order to boost sales and fill shelf space.

According to a report by Reuters, the retailer has opened five 3,000-sq.-ft. play areas over the last week, featuring educational toys and games.

The five stores, open on a trial basis, are located in New York, New Jersey and Connecticut. Barnes & Noble has said it will open more if the boutiques prove successful during the upcoming holiday season. The retailer is also broadening its array of items at its children's department at 500 stores for the 2010 holiday season.

"It could be huge for us," William Lynch, CEO, said in the report.

But the company, which operates about 720 stores, has said it has no plans to significantly reduce its store count and instead intends to repurpose much of its floor space these children’s toy areas and for demonstrations of its Nook e-readers.

Barnes & Noble put itself up for sale in August and in September fended off a proxy fight waged by dissident investor Ron Burkle.