KB Toys sets up seasonal shop on New York's posh Fifth Avenue - Brief Article

DSN Retailing Today, Oct 7, 2002 by Molly Prior

NEW YORK -- The New York City flagship toy stores of FAO Schwarz and Toy "R" Us will soon have a new neighbor. Fellow specialty toy retailer K*B Toys has announced plans to set up shop along Fifth Avenue for the holidays, practically in the shadows of its formidable competitors.

This month, K*B Toys will temporarily take over prime real estate in Rockefeller Center, formerly occupied by the cosmetics chain Sephora, for the upcoming holiday season and then close its doors Dec. 24 for the permanent tenant to take over.

"We're taking advantage of a timely real estate opportunity in order to showcase our renewed emphasis on the customer in this landmark location," said Mark Scott, executive vp. "New York City's Fifth Avenue is perhaps the nation's premiere shopping destination. If our customers respond favorably to our presence here, we will explore opening similar permanent stores both here in New York City and in other major markets."

Last year, K*B Toys, a company that's annual sales are largely dependent on the fourth quarter, opened more than 125 seasonal holiday K*B Toys Express stores, just as it has done in years past, to take advantage of the season's heavy traffic and drum up incremental sales.

The Fifth Avenue seasonal store's three floors of retail space, totaling 20,000 square feet, dwarfs the typical 3,000-square-foot mall-based K*B Toys Express store. It is, however, the smallest store in New York City's impromptu toy district. FAO Schwarz, eight city blocks north, features 75,000 square feet of selling space, while Toys "R" Us, eight blocks south, totals 110,000 square feet.

However, in a chain averaging 3,500 square feet per store, 20,000 square feet leaves plenty of room to work with. K*B Toys will fill the main floor of its Fifth Avenue store with themed boutiques featuring the season's hottest toys and licenses, including Barbie, Spider-Man, Disney Princesses, Dora the Explorer, SpongeBob SquarePants and Harry Potter.

The second floor will house preschool toys and K*B Toys' online brand eToys. The eToys shop, dedicated exclusively to specialty and learning toys, marks the first time K*B Toys has marketed the eToys brand in a store. The move will be part of a larger initiative to integrate eToys shops in 80 K*B Toys locations nationwide.

The bottom floor will showcase boys' toys, video hardware, video software and interactive displays courtesy of video entertainment companies.

Holiday shoppers bustling along the sidewalks outside the store will see professionally designed window displays, much like that of FAO Schwarz up the street or, of course, Toys "R" Us down the street.

K*B Toys, which had previously been content to be known as that toy store in the mall, will use the Fifth Avenue store as a barometer to measure the validity of grand opening an elaborate, high-profile store, said spokesman John Reilly.

At the same time K*B Toys busies itself boosting its prominence as a specialty toy retailer, the company moves further outside the realm of a traditional retailer by acting as a supplier to such stores as Safeway and Sears, Roebuck and Co.

Last holiday, K*B distributed seasonal toy displays to more than 1,000 Safeway grocery stores; it will do the same this season.

Last fall, K*B struck a licensing deal with Sears to test 29 "K*B Toys at Sears" holiday toy departments in four markets-Chicago, Los Angeles, Detroit and Mobile, Ala. The 1,500-square-foot sections were essentially scaled-down K*B Toys stores, complete with personnel and a cash register.

"We bring to the party expertise in the business, the ability to control risk and bring traffic. I think that's the three main things Sears is looking for us to do. If that can be done and it's profitable for both of us, I don't think Sears can rule it out," Fred Hurley, vp and divisional merchandise manager, said following the Sears announcement last year.

By all accounts, the test is proving successful, prompting the retailers to expand their relationship by launching the second phase. This holiday, K*B will roll out "K*B Toys at Sears" concepts to 77 locations at select Sears stores in Florida, Georgia, Hawaii, Indiana, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island and Washington. The expanded partnership also establishes K*B Toys as the exclusive toy supplier for Sears' 'Wish Book" catalog and Sears.com.

With K*B's help, this year Sears will provide its customers with one of the largest selections of toys for the holiday that Sears has ever offered through its catalog and online channel. The expanded assortment in the Sears "Wish Book" totals approximately 900 items. The toy and video game assortment offered through Sears.com will include approximately 2,500 items and feature an expanded preschool and learning category with brands new to Sears stores, such as LeapFrog, Radio Flyer and Neurosmith.

Taking its cue from Toys "R" Us' successful Home Depot toy line, K*B Toys and Sears have teamed up in a trademark license agreement to create Craftsman-branded toy tools. The toys, developed by K*B, will be marketed under the brand "My First Craftsman" and will be sold this holiday in K*B Toys and Sears stores.