Toys 'R' Us Holiday Period Same-Store Sales Down 2.7%

Sales at existing Toys "R" Us Inc. (TOY.XX) stores fell 2.7% for the holiday period and are down slightly for the year while gross margin improved, led by better results in the U.S., the toy store chain said Friday.

The privately held retailer has struggled to hold its position amid stiffer competition from the likes of Wal-Mart Stores Inc. (WMT) and Amazon.com Inc. (AMZN). Last year, it swung to a loss on write-downs and falling sales in the U.S. and abroad.

In response, Toys "R" Us launched a series of changes, including cutting the number of promotions and remodelling stores. For example, stores added prominent displays featuring featured popular toys and gifts under $30 to help drive sales. In September, the company touted the changes saying it had recorded sales growth in the U.S. for the first half of the year on a same-store basis. Through Jan. 3, however, same-store sales are down 5% while net sales are down 1.3% form the year-ago period, though gross margin improved more than 200 basis points for the holiday season and about 100 basis points for the year, the retailer said.

Internationally, sales rose 1.2% and 1.3% on a same-store basis.

Based in Wayne, N.J., Toys "R" Us was bought in 2005 by Vornado Realty Trust (VNO) and private-equity firms Bain Capital and Kohlberg Kravis Roberts & Co. for $6.6 billion.

Write to Maria Armental at [e-mail]

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