Toys 'R' Us to shut 64 stores, fire 1,900

Bloomberg News Service

Customers head into the Toys "R" Us in Lawrenceville, N.J. The company and its subsidiaries, Babies "R" Us and Kids "R" Us, said it would close 64 stores nationwide after losing $91 million in the past three quarters. Associated Press

The second-largest U.S. toy retailer will shutter 37 Kids "R" Us stores, which sell children's clothing, as well as 27 Toys "R" Us stores. The company would not release the list of stores to be closed. It operates one store in Hawai'i at Pearlridge.

The clothing chain "has been a drag on earnings, and it certainly has been a drag for management," said Marc Ravitz, an analyst at Grace & White Inc. "If they can turn it around, it'll be a more profitable company."

The company is closing the 64 stores so it can focus on more profitable ones, said Chief Executive John Eyler in a conference call.

Eyler has added exclusive toys and changed store layouts to win shoppers back from Wal-Mart Stores Inc., the biggest U.S. toy seller. The company also is combining some toy and clothing stores to try to attract customers.

The firings account for about 2.7 percent of the company's 69,000 employees.

Shares of Toys "R" Us rose $1.17, or 6.2 percent, to $19.92. They have fallen 24 percent in the past year.

The company will have $126 million in restructuring costs in its fiscal fourth quarter, which ends Saturday.