Toys R Us Inc. (Parsippany, N.J.), the nation's largest dedicated toy retailer, has announced it will close 64 stores — 27 Toys R Us stores and 37 Kids R Us apparel stores — over the next several months. But it will also spend somewhere around $80 million to upgrade 130-140 stores to its new format, called “Mission Possible.” The renovations are expected to be completed this year.
The new format features wider aisles and themed toy areas. The company currently operates 433 of its 1213 toy stores in the new Mission Possible format. It operates about 400 other stores under the Kids R Us, Babies R Us and Imaginarium nameplates.
CEO John Eyler told retail analysts, during a conference call, that Kmart's bankruptcy would free up $250 million worth of toy inventory if the Troy, Mich. retailer closes 500 stores as has been speculated. “If that were the case, we certainly expect to compete for that market share,” said Eyler, whose company has been surpassed in total toy sales by Wal-Mart Stores (Bentonville, Ark.). “There are two big market-share players, us and Wal-Mart. Our combined market share is greater than Kmart and Target today. We would expect Wal-Mart to continue increasing its market share because it continues to build stores. And we continue to grow our market share. Can we grow parallel to them? the answer is, absolutely.”