At Toys R Us, hopes for a turnaround rest on last-minute shoppers
With just days left until Christmas, Marita Percival decided it was time to get serious.
So she called in sick to her job as a special-education teacher and headed to Toys R Us, searching for ideas for her 3-year-old daughter and hoping to finish her holiday shopping in one fell swoop.
“It’s coming down to the wire, so I literally woke up this morning and said, ‘OK, it’s time to shop,’” she said Tuesday morning as she filled her cart with Playdoh sets, a dollhouse, play tent and Mickey Mouse puzzle. She stopped to use her phone to scan Google reviews of an interactive puppy that responds to voice commands and poses for selfies. It had been marked down to $49.98 from $129.99.
“Looks good, “Percival said as she added one more item to her cart.
Welcome to the final stretch of the holiday shopping season, as frantic shoppers and desperate retailers shift their focus to last-minute trips to the store. Nearly half of Americans have yet to finish their holiday shopping, according to a survey released Wednesday by the National Retail Federation.
It’s a critical time for retailers, too, as they duke it out for the last of shoppers’ budgets. Kohl’s stores are staying open around the clock from Thursday until Christmas Eve, while Nordstrom is of- fering 24-hour curbside pickup across the country.
The retail industry has had a tough year. Hundreds of companies have filed for bankruptcy, and many more have closed branches as they struggle to compete with such online giants as Amazon. com. Some, including Target, have warned that holiday sales may not be as robust as they had hoped, and analysts say they are expecting it to be another challenging season for department store chains including Macy’s, Kohl’s, Nordstrom, J.C. Penney and Sears. (Jeffrey P. Bezos, the founder and chief executive of Amazon, owns The Washington Post.)
For Toys R Us, the run-up
to the holidays is particularly r important. The retailer filed t for bankruptcy protection in September, right before a three-month period that typically accounts for nearly 40 percent of its annual sales. There have been reports that the company is considering closing at least 100 stores across the country as it looks to pay down $7.9 billion in outstanding debt. t This week brought more troubling news: Toys R Us reported an 8 percent sales drop for the period ending in September, contributing to a $623 million loss.
“Our results for the quarter were disappointing,” chief executive Dave Brandon said in a statement. “We recognize the need for change to better meet customers’ ever evolving shopping preferences.”
The company has added “Play Labs” to some of its stores, where children can test new toys, and created an augmented reality app that allows shoppers to play virtual basketball and other games while they’re shopping. But analysts said it will take more than one holiday season to turn things around.
On a recent weekday, the Toys R Us store in Falls Church, Virginia, was humming with shoppers, but there was no long wait at the cash registers.
Ariel Sandy, of Woodridge, Virginia, offered one explanation. He had done much of his shopping online and only came to the store to pick up last-minute puzzles for his children, ages 5, 15 and 18. Mary Blair, of Annandale, Virginia, said she, too, shopped online but decided to bring her 9-yearold son, Holland, to pick out a present for his 6-year-old brother.
“I’ve actually never been to Toys R Us before, which is crazy because I have three boys under 10,” she said.
Bankruptcy experts said the company’s future will largely depend on whether it can persuade its suppliers to keep shipping their products.
Mattel – the maker of Barbie, Fisher-Price and American Girl – said the Toys R Us bankruptcy was mostly to blame for a 13 percent drop in global sales during the most recent quarter. Others toymakers, including Hasbro and Jakks Pacific, have also begun fretting about what might happen if the major distributor stumbles.
“I don’t want to be doom and gloom, but this is a critical time for Toys R Us,” said Katherine Waldock, a finance professor at Georgetown University.
This week, the retail giant rolled out a number of discounts aimed at attracting last-minute shoppers: 20 percent off all Power Rangers action figures, 50 percent off Sofia the First preschool toys, buy-one-get-one 40 percent off deals on Crayola and Nerf products.
But those promotions didn’t matter much to Christian Woods of Washington, D.C., who said his trip to Toys R Us was fueled by equal parts desperation and nostalgia. He needed gifts for his 7-year-old cousin, so he picked the largest toy store he could find.
“A lot of these gifts are spontaneous, so we wanted to come somewhere where we could look around,” he said. “This is a clean sweep. We get everything in one go.”
Next to him, his uncle pulled up screenshots he’d taken on his phone of the year’s hottest toys. Their cart was overflowing with an interactive tiger, a children’s smartwatch, Barbies, books and board games. They stopped to check out a play kitchen.
“This is a total blast from the past,” Woods added. “I haven’t been to Toys R Us in – man, I don’t even know how long.”
For decades, Toys R Us, based in Wayne, New Jersey, was the country’s pre-eminent toy retailer, with a towering flagship in New York’s Times Square (now closed and home to Old Navy) and a ubiquitous icon, Geoffrey the Giraffe.