Consumer Products

Merch makeover madness–KB Toys rebuilds with new product and attitude

Not one to say uncle, the new management team at KB Toys has been busy opening remodeled stores over the past two months, and rebuilding the mall-based chain that went into bankruptcy in 2004. The Pittsfield, Massachusetts-based toy retailer traditionally specialized in selling closeout items, while putting little emphasis on stocking hot new toys. The good news for toycos is it's done a 180. Infusing its remodeled stores with the latest and greatest product has become a top priority for the once-beleaguered retailer.
June 1, 2006

Not one to say uncle, the new management team at KB Toys has been busy opening remodeled stores over the past two months, and rebuilding the mall-based chain that went into bankruptcy in 2004. The Pittsfield, Massachusetts-based toy retailer traditionally specialized in selling closeout items, while putting little emphasis on stocking hot new toys. The good news for toycos is it’s done a 180. Infusing its remodeled stores with the latest and greatest product has become a top priority for the once-beleaguered retailer.

After Prentice Capital came to the rescue with a US$20-million injection of cash in 2005, the company emerged with just over 600 stores from its once 1,300-strong outlet lineup. Former Toys ‘R’ US president Greg Staley took over as CEO last August, and to date 11 stores have been renovated. Moreover, an opening in Atlantic City last month marked the addition of KB’s first new store in the past three years.

Ernie Speranza, KB’s chief marketing officer, says the stores are being updated with more open spaces and bright lighting, and adds the old KB locations were not very well arranged. ‘You almost had to hire a Sherpa guide to take you over the mountain of toys that they would stack up in front of the store,’ he explains.

The revamped outlets will also be outfitted with TV monitors that broadcast commercials and new product demos. Placed at kid-eye level, the TVs are meant to showcase promotional merch that doesn’t have an allotted ‘Try Me’ space in-store. Speranza says it’s an attempt to make the toy experience more interactive because kids need to understand what a toy does before they really want to buy it.

The creation of new merchandising planograms, with a focus on accommodating more first-run product, lies at the heart of the store renos. The remodeled stores are arranged to encompass five major sections, or strike points, to highlight the new addition of licensed product. The first two strike points are located at either side of the store entrance, with special displays, signage and TV screens for new licensed-character SKUs such as Dora the Explorer items. Two similar strike points are positioned in the middle of the store, with the remaining one in the back dedicated to Fisher-Price products.

Finally, KB is increasing the number of staff hours and putting the floor-level sales team through a more rigorous training program to build its product knowledge and encourage customer interaction, and therefore, loyalty.

Speranza says it is too soon to determine how well the new stores are doing compared to the old ones, but there are plans to renovate 60 or so additional KB locations by the end of the year, with the remaining spaces undergoing conversion in the next few years. Plans are also in the works to open approximately 15 new shops by the end of 2006.

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