Declined sales at the industry giant: In the third quarter of 2017, Toys”R”Us Inc. achieved net sales of $2,018 billion, 89 million less than in the third quarter of last year. The US business accounted for 1.257 billion dollars and the international business excluding Canada for 761 million dollars. The main reason for the decline is the weak demand in the baby segment.

The CEO of Toys“R“Us Inc., Dave Brandon, openly admits: “Our third-quarter results were disappointing. They not only reflect competition in the retail sector. They also show the challenges we face in the baby and learning areas. Although we continue to see growth in our key toy area, we are noticing the need for change to better meet our customers’ evolving needs.” A first step in this direction was the financial restructuring process which started in mid-September. On September 18, 2017, the Group had filed for bankruptcy for itself, some of its US subsidiaries and Canadian companies. Since then, the results of Toys-Canada are no longer listed under Toys”R”Us Inc. Quarterly results showed a difference between US and international business. While US sales fell from $1.349 billion in the previous year to $1.257 billion, international sales rose from $758 million to $761 million.

Other companies blame Toys”R”Us for their decreased sales

Meanwhile, the business situation at Toys”R”Us is growing in size. Some suppliers blamed the company for their own poor quarterly figures. Mattel boss Margo Georgiadis whose group recorded a 13 percent decline in net sales: “Our performance in the third quarter was clearly disappointing. This was due to pressure in North America with Toys”R”Us filing for bankruptcy, tighter retail inventory management and the challenges of some brands lagging behind expectations.” Hasbro’s CEO Brian Goldner presented the third quarter results for 2017 and also spoke of a “negative impact on our quarterly results and our operating profit” due to the Toys”R”Us insolvency petition.

While Germany’s Toys”R”Us celebrated its anniversary year in 2017 under the motto “30 years of joy”, there were announcements in Great Britain that markets should be closed. Toys”R”Us UK Managing Director Steve Knights: “Our new, smaller and more interactive stores are the right shopping locations and are running well. Our new website has generated significant growth in online sales and click-and-collect sales. Though the department stores we opened in the 1980s and 1990s, which were successful at that time, are too large and expensive in the current retail environment. The business has suffered losses in recent years, so we need to take strong and decisive action to accelerate this transformation.”


Image: r.classen/Shutterstock