Kids World to strengthen market position - Toys 'R' Us megastore, Toys 'R' Us Kids World - TRU Goes Forth with Baby, Mega Concepts

Discount Store News, May 20, 1996 by Richard Halverson

ELIZABETH, N.J. - After months of announcements and speculation, Toys "R" Us finally broke ground on its first megastore a 95,000-sq.-ft. unit that combines its new Concept 2000 toy store with its just-opened Babies "R" Us superstore and a Kids "R" Us children's apparel outlet.

TRU is banking on these new formats to revitalize itself after a less than stellar performance in 95 and to better position it for the future. At the heart, the new megastore strengthens TRU's leadership position in the toys and children's products arena.

Carrying the name of Toys "R" Us Kids World, the first unit of the new megastore was already in Elizabeth, N.J., at the time of the official groundbreaking April 29, and will open to the public in October. The Elizabeth Kids World covers 95,000 sq. ft., while a second unit to be opened this year in Fairfax, Va., will be 85,000 sq. ft., expanded from an existing TRU unit that is being remodeled.

The number of Kids World stores scheduled for '97 remains to be determined, said Roger Goddu, president of U.S. merchandising.

Kids World will focus on fun. Goddu told DSN, by introducing a new entertainment element to toy shopping.

TRU is negotiating with a number of leasees to add entertainment rides, such as a carousel and a Ferris wheel, a restaurant, an innovative candy area,a hair salon and a portrait studio. Goddu said. These new leased ventures will occupy 10.000 sq. ft. on the front right corner of the store.

The megastore will also feature a party room that will be linked to the restaurant and entertainment area.

The one-floor store features an unusually high roof line in order to provide for a sky light system that will make the interior bright. "We'll have a lot of glass in the roof," Goddu said.

In layout, Kids World will adopt a racetrack format - typically found in a discount department store - instead of the usual TRU grocery store layout, he said. Concept 2000, the retailer's new toy store prototype, will also feature a unique, oval-shaped race-track when the first unit opens next summer.

According to Goddu, Kids World will have:

* A center entrance and power aisle right down the center of the store;

* Wide aisles and low gondolas for better visuals;

* Power tables used for product merchandising;

* Apparel merchandised in the center of the store, with hard goods wrapped around it;

* All baby merchandise featured on the right-hand side of the store;

* A cross-aisle layout for cross-shopping - adjacencies will place boys' toys across from boys' apparel and girls' toys across from girls' apparel.

Kids World is a tenant of IKEA, the Swedish-owned furniture and home furnishings chain. Its opening will follow closely on the heels of Incredible Universe, which will open an 185,000-sq.-ft. store at the site in July.

On land purchased from the New York/New Jersey Port Authority, IKEA is developing what it hopes will be a retail complex with a wide regional following from New York City, including the borough of Staten Island and northern New Jersey.

Attracting Kids World to this site is IKEN's draw of about 2 million shoppers per year, said Roy Perez-Daple, president of the IKEA Center Urban Renewal, the developer of the property surrounding IKE's store in Elizabeth.

In addition to the Kids World unit of 95,000 sq. ft., IKEA is scouting out tenants for another parcel that can accommodate a 60,000-sq.-ft. store and is negotiating to buy additional land from the Port Authority.

Moreover, developers are laying the groundwork for a 1.5 million-sq.-ft. off-price and manufacturer outlet mall on land alongside the Kids World store.

IKEA and its new tenants have the advantage of being located at the Newark Airport exit off the New Jersey Turnpike, part of I-95, which is the major East Coast artery between Washington, D.C., and Boston.

IKEA already benefits from being located in an area that enjoys a 3% sales tax rate, just half of the 6% rate elsewhere in New Jersey, Perez said. In New York City, the sales tax rate is 8.25%. Kids World will also benefit from the low sales tax rate, Perez predicted, especially at Christmas when parents lay out several hundred dollars for toys.

TRU and IKEA go way back, and TRU has built several stores around the world next to IKEA, Michael Goldstein, vice chairman and ceo, said at an official groundbreaking ceremony, which took place with the shell of the 95,000-sq.-ft. store looming in the background.