Renovations 'R' Expensive

Saying that it spent more to renovate stores than it brought in on sales of outdoor toys, Toys 'R'Us (Paramus, N.J.) reported an $18 million loss for its first quarter ending May 5, 2001. In the same quarter a year ago, the nation's Number One toy retailer reported a gain of $200 million.

In its statement, the company noted that a cooler-than-average spring had hampered sales of swing sets, bicycles and the like. It has also been involved in an extensive remodeling program that includes breaking up long aisles with boutique areas. Same-store sales at U.S. stores were down 2 percent, due in part to disruptions caused by remodeling. The company has previously announced that about 250 stores in the U.S. would be remodeled this year.

The company said it anticipates a stronger second quarter through sales of newly released video games. It insists it has assurance from Nintendo that it will have sufficient supply of the new Game Boy Advance, to be released in June. Microsoft is also introducing its Xbox game console this year.

While Toys 'R'Us is still the Number One toy specialty retailer, it has lost considerable market share to discounters, especially Wal-Mart. In addition to its more than 1500 toy stores, it operates more than 200 Kids 'R'Us apparel stores, more than 140 Babies 'R'Us stores selling infant/toddler apparel, furniture and feeding supplies and about 40 Imaginarium stores selling educational toys.