We continued to build our Imaginarium learning category and expanded it to all of our stores in 2002. Items like Madeline^TM, LeapFrog® and Thomas & Friends Wooden Railway System^TM were well received. We'll identify additional opportunities to expand that category even further.

Teentronics did well and continues to present a growth opportunity for us. Portable electronics, in particular, were strong as were licensed electronic goods such as Barbie® televisions and Hello Kitty® phones. Since age compression continues to be an issue for the industry, Teentronics is an area we will continue to develop and expand in 2003.

Other items such as Rescue Heroes^TM and licensed plush like Chicken Dance Elmo were strong among the pre-school set. Bratz^TM dolls, Barbie®, Polly Pocket^TM and DisneySMPrincess were among the "must have" dolls for girls in 2002. Spider-Man^TM, mini RC cars and Radio Flyer® were hot for boys. Yu-Gi-Oh!^TM and Beyblades^TM also proved to be among the trendiest products of the year.

Our Times Square flagship store celebrated its one-year anniversary in 2002. According to NYC & Company, New York City's official tourism marketing organization, Toys"R"Us Times Square is one of the city's top tourist destinations. The new store is a must-see attraction for any family visiting New York. Toys"R"Us Times Square has quickly established itself as The Center of the Toy Universe™, hosting launches for virtually every new toy, and a desired venue for many special events.

In addition to being fresh and ever-changing, Toys"R"Us Times Square disproved the myth that great service can't be found in Manhattan. The store saw great success in its pursuit of customer service. According to company research, it led the Toys"R"Us stores in guest delight scores.