What's Next?

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What’s Next for Toys R Us?

October 03, 2008
by Lindsey Chapman
Toys R Us has been a fixture in the world of kids furniture and toys for six decades. Since it was formed, the store has experienced considerable success in the business world. But the passage of time has also posed some difficult changes; can Toys R Us maintain its popularity?


Toys R Us began as a children’s furniture store in Washington, D.C., in 1948. Founder Charles Lazarus, who wanted his business to appeal to post-war baby boomers, was solely responsible for the store, taking care of everything from bookkeeping to product deliveries. The furniture business thrived, and Lazarus’s customers began peppering him with questions about selling toys for babies and older kids. He added a cradle gym to his inventory, followed by tricycles and other toys. Along the way, Lazarus realized that toys wore out more quickly than furniture, and parents would continually come back for replacements.

Making the Store Memorable

One of the ways Toys R Us has solidified a place in consumers’ minds is through its catchy “Toys R Us kid” jingle. The Kaplan Thaler Group (KTG), an advertising firm, created the ad years ago; KTG cofounder Linda Kaplan Thaler, who is a composer with a music degree, wrote the music herself. This same agency is responsible for other memorable advertisements, including the Aflac duck and the Herbal Essences hair commercials.

Check out an early Toys R Us kid commercial at YouTube. The store’s familiar mascot, Geoffrey the giraffe, is also featured.

Toys R Us had been in business a few years before introducing Geoffrey in 1960. As Charles Lazarus continued to shape his business, he realized that his store needed to be perfect for “the everyday shopper.” He wanted Toys R Us to appeal to parents looking for the ideal birthday present for their child, and to kids who want a place to spend their allowance money. This is the model the store still tries to follow today.

Price Wars

The Christmas season in 2003 was difficult one. Numerous toys stores, including Toys R Us engaged in a price war. Led by Wal-Mart, prices dropped dramatically across the industry. FAO Schwartz and KB Toys declared bankruptcy. Toys R Us, which had handed over the title of “king of the toy hill” to Wal-Mart five years prior, struggled with the liquidation of inventory from FAO Schwartz and KB Toys. The retailer had considered selling the toy chain to focus more on Babies R Us, but instead, the company decided to turn to suppliers for help. If Toys R Us had given up, toy suppliers would have relied largely on Wal-Mart, “and none want to be solely subjected to the demands of a behemoth well known for driving down suppliers’ prices,” The Motley Fool explains.

In February 2006, Jerry Storch took over as CEO of Toys R Us after he didn’t obtain a top job at Target. He decided to try to help the store rather than shut it down, and began operating under a “science of retailing” philosophy. “A big part of retailing is to make it easier for the customer to find what they want and to stimulate add-on purchases when something belongs together,” Storch told ABC News. He’s also taken a hard line with manufacturers who weren’t making top-quality products for Toys R Us to sell.

Protecting Babies

Earlier in 2008, Toys R Us took a stand against crib makers who were producing potentially unsafe products. Government standards for cribs weren’t strict enough, the company alleged, so it decided to require more of manufacturers with cribs on its shelves. Even though Toys R Us is just one retail chain, the fact that it sells hundreds of thousands of cribs annually gave it the influence it needed to affect crib makers, regulating everything from the type of trees they used in their products to how they attach the spindles to the crib railing. “What we try to do is stand up for the consumer and say, ‘What would they do if they had the facts?’” Storch said.

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