Trouble in toyland: Toys "R" Us tightens ship, while FAO Schwarz heads into second round of bankruptcy.(hot copy: an industry update)

Children's Business, January, 2004 by Clack, Erin E.

IN A SURPRISING DISCLOSURE, top toy retailer Toys "R" Us, headquartered in Wayne, NJ, revealed its intent to shutter its entire Kids "R" Us children's clothing chain--146 stores in all--by the end of this month. The company also announced plans to close 36 freestanding Imaginarium stores (which sell educational toys and gift products), along with distribution centers in Michigan, New Jersey and Georgia. As a result of the developments, the company is forced to slash up to 3,800 jobs. Financial woes, festering for some time, are behind its sudden decision to trim its operations. The retailer suffered a sharp net loss of $38 million in the third quarter of 2003, aggravated by a slump in sales and soaring overhead costs.

"We have worked hard over the past few...