By focusing on three guiding principles -- attracting guests to the Toysrus.com site, converting visits to sales and providing the best online shopping experiences -- Toysrus.com remains one of the strongest players in the space. In 2001, Toysrus.com was the #1 most visited site for toys, video games and baby products, attracting more than 66 million visitors and expanding its customer base to nearly six million.

Toysrus.com consistently ranks in consumer surveys as the best overall toy site.

Growing the online family of sites

This past year some new and exciting features were added to the Toysrus.com shopping experience, along with major upgrades to existing sites. Significant enhancements to the Toysrus.com site have been developed, including a fresh new look and easier-to-use navigation features. Customers can now shop by age, category, brand, advertised specials, product reviews and much more. To further develop relationships with families, Babiesrus.com and Imaginarium.com were added to the existing family of sites.

Delivering great products and features

In May, Babiesrus.com was launched. The groundbreaking Babies“R”Us Baby Registry has proven to be as popular online as it has been in stores. Expectant parents can instantly create or update their registries online. The registry also allows relatives or friends to shop and send the perfect gift, right from the convenience of their own homes.

In July, Imaginarium.com was launched. The site offers the same exciting features found in Imaginarium stores: exclusive learning toys and the innovative Imaginarium Learning System^TM, a powerful search engine that helps guests easily identify and shop for appropriate toys according to learning values. In addition, useful advice from Toyologist Experts and the Viewpoints On Parenting newsletter provide added value and help build relationships with parents.

Continuing the momentum in the future

Despite a difficult retail environment, sales grew by more than 54 percent -- from $180 million to $277 million -- in 2001. In the second quarter, sales nearly quadrupled, and Toysrus.com had a strong holiday season.

Led by strong demand for toy and video game products, hot entertainment properties and expansion into new categories, Toysrus.com is looking forward to impressive growth in 2002. As Internet usage increases worldwide, Toysrus.com will continue to strengthen its online presence.