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Our
U.S. toy stores exemplified our company’s progress and purpose in 2001.
While sales and earnings for the year were disappointing, the sales performance
of the strategically repositioned Mission Possible stores was encouraging,
clearly validating our long-range strategic plan.
At
Toys“R”Us, we know that successful merchandising is more than simply moving
a box from a shelf to the cash register. As the headquarters for national
brands, and by increasing the impact of our own exclusive brands, Toys“R”Us
is at the forefront of offering what families and kids want: the best
selection of the highest quality products at great value. Our position
as a leader in toys, video games, educational and juvenile products, gives
us the opportunity to benefit from growth in these businesses.
Last
year, we improved merchandise flow, worked more closely with suppliers
to deliver more of the best-selling products and refined assortment and
planning strategies, all to make sure we were in stock on the items kids
want most. With milestones like Bill Gates selling Microsoft’s very first
Xbox at the flagship store in Times Square, or development of exclusive
merchandise celebrating the 20th anniversary of E.T., the Extra-Terrestrial,
Toys“R”Us leads the way.
Continually
improving guest service
We
understand how critical delighting guests is to long-term success. Our
research shows that 70 percent of our customers are Moms. At our 2001
national meeting, more than 1,000 management associates listened to a
panel of Moms to better understand mothers’ expectations and needs. Recent
research revealed that our investment is paying off in key aspects of
guest satisfaction, and further, that satisfied guests were spending more,
staying longer and coming back to our stores more often. In addition,
Toys“R”Us had high top-of-mind awareness among consumers going into the
2001 holiday season.
Building
memorable stores
In
2001, we continued to transform the Toys“R”Us store experience by refurbishing
our stores to our Mission Possible format, ending the year with a total
of 433 converted stores and completing 21 major markets. The entire portfolio
of converted stores posted an average increase of 8 percent per store
for the five weeks of December, validating this strategy in the toughest
of times. We continued to create stores, called “combo stores”,
containing both Toys“R”Us and a select assortment of Kids“R”Us merchandise.
By the end of 2002, more than half of our stores will be converted to
this successful format, and the majority of our stores will contain Imaginarium
worlds. All of these changes create more destination appeal and offer
more shopping solutions for parents and children.
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