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TRU’s holiday sales take a dip

While toy industry players wait with bated breath to see how much overall holiday sales will help or hurt their bottom lines, Toys 'R' Us was the first major toy retailer to announce its vital stats. Though Santa certainly didn't leave a big lump of coal in the retailer's stocking, the company did report that 2004 holiday net sales were down a slight 0.9% to US$4.29 billion, compared to US$4.33 billion in '03. But this dip can almost entirely be accounted for in the difference between a US$102-million decline in sales caused by shuttering the Kids 'R' Us chain last year, and a US$100-million gain in currency translation.
January 1, 2005

While toy industry players wait with bated breath to see how much overall holiday sales will help or hurt their bottom lines, Toys ‘R’ Us was the first major toy retailer to announce its vital stats. Though Santa certainly didn’t leave a big lump of coal in the retailer’s stocking, the company did report that 2004 holiday net sales were down a slight 0.9% to US$4.29 billion, compared to US$4.33 billion in ’03. But this dip can almost entirely be accounted for in the difference between a US$102-million decline in sales caused by shuttering the Kids ‘R’ Us chain last year, and a US$100-million gain in currency translation.

TRU chairman and CEO John Eyler said in a statement that he’s pleased with the chain’s performance, given that overall sales of traditional toys in 2004 are expected to be down by 5% once all the numbers are in. He suggests that a 15% inventory drop from 2003 stock levels, triggered in part by ‘Green Tag’ markdowns in Q3 2004, will boost supply chain efficiency in the coming year – no doubt an incentive for companies looking at buying the chain’s global or U.S. stores, which were put on the market in August.

Despite an 11.6% bump in Q3 2004 on-line sales over the same quarter in ’03, Toysrus.com‘s sales decreased 3.3% to US$176 million during the nine-week holiday period. Interestingly, the 2004 Holiday eSpending Report from Goldman, Sachs, Harris Interactive and Nielsen//Net Ratings indicates that on-line shopping in general spiked 25% to US$23.2 billion, with toys/video games posting the second largest category total and a sales hike of 15%. TRU attributed the holiday decline partially to changing up the website’s free shipping policies – a strategy that’s expected to pay off when overall financial results for the year are tallied.

Meanwhile, the future looks bright for the company’s newly anointed crown jewel, Babies ‘R’ Us. The chain continues to thrive, posting a comparable-store sales increase of 1.6% for the 2004 holiday season and a year-to-date bump of 2.2%.

About The Author
Lana Castleman is the Editor & Content Director of Kidscreen and oversees all content for Kidscreen magazine, kidscreen.com and related kidscreen events. lcastleman@brunico.com

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