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While we continue to focus on taking aggressive steps to separate and distinguish our stores and shopping experience from the competition, it is important that we listen to the consumer. And, we are pleased by what we are seeing...and hearing. We have conducted independent research for many years to track how our guests feel about Toys“R”Us. We are encouraged that our research shows that the population at large understands what we’re trying to accomplish through our strategies. Consumer ratings show improvement in how guests feel about the content in our stores, our better in stock position, overall store experience, and particularly the enhancement of guest service. This became increasingly evident during the highly competitive holiday selling season where our traffic volume and purchasing records showed that we made significant inroads and gained market share in key strategic markets. Growing
the “R”Us family
Babies“R”Us,
often our first relationship experience with young families, continues
to be a high performer, opening 20 new stores as planned in 2001 and posting
a 15 percent increase in operating earnings for the full year. We will
continue to invest in Babies“R”Us by building 20 more new stores in 2002.
The combination of authoritative merchandise assortments, easy-to-shop
appealing stores and excellent guest service define the Babies“R”Us experience
and represent the same strategic principals being implemented in all divisions.
We
began the repositioning of Kids“R”Us this past year. Despite the effects
of September 11, combined with an unseasonably mild winter, the results
of that repositioning were reflected in improvement of our sales trend
in the fall season. A major highlight was the performance by 11 prototype
stores that generated solid double-digit increases. We plan to convert
30 more stores to the new prototype this year, continuing to position
Kids“R”Us as the best source for “fashions that are trend-right at prices
families can afford.”
In
the International division, operating earnings, excluding earnings from
Toys“R”Us- Japan for all periods, reached an all-time high with an increase
of 6 percent for the year. Our International business is working to reduce
expenses and increase efficiencies throughout its global operations. International
continues to execute many of the same strategies as the U.S. divisions,
including the addition of Universe of Imagination -- known in the U.S.
as Imaginarium -- and Animal Alley departments in all Toys“R”Us stores
worldwide.
The
Toysrus.com subsidiary
emerged as the strongest player in its category, the #1 most visited site
for toys, video games and baby products. Sales increased by 54 percent
for the year versus the 2000 fiscal year. Fiscal 2001 operating losses
at Toysrus.com were reduced by $42 million for the fiscal year, versus
the same period in 2000, after excluding non-recurring charges related
to the alliance with Amazon.com,
which were recorded in the third quarter of 2000. Toysrus.com
launched Babiesrus.com
and Imaginarium.com
web sites on the Amazon.com
platform this year and had a very successful holiday season with a high
level of guest delight.
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