TOYS“R”US, INC. OUTLINES “TRU TRANSFORMATION” STRATEGY

New CEO and U.S. President Discuss Plans to Make Company Fit for Growth by Fixing Foundational Issues, Putting Disciplines into Operational Processes and Right-Sizing Cost Structure; Strategic Plan Places Focus on Improving Customer Experience In-Store and Online, Simplifying Promotions and Developing a Clear Pricing Strategy


WAYNE, NJ (March 26, 2014) At presentations today for investors, industry analysts and the media, Toys“R”Us, Inc. outlined its strategy for improving the company’s operational performance and positioning the business to drive profitable growth in the future. Antonio Urcelay, Chairman of the Board and Chief Executive Officer, Toys“R”Us, Inc., and Hank Mullany, President, Toys“R”Us, U.S., provided a comprehensive assessment of the company’s fiscal 2013 performance and discussed the go-forward priorities and actions that will drive its “TRU Transformation” strategy.

“As we look to the future, our strategy will establish a path to sustainable business growth, building upon the company’s unique strengths. Toys“R”Us is one of the most recognized brands in the world with a strong international presence and a large and loyal customer base,” Mr. Urcelay said. “Our global network of stores generates strong profitability, and together with our $1.2 billion global e-commerce business, is integral to our growing omnichannel capabilities. And, as the world’s leading dedicated toy and juvenile products retailer, we have well-established relationships with our manufacturing partners, and can provide them with a year-round distribution outlet that showcases the broadest selection of their products in 36 countries around the world.”

Mr. Urcelay added, “Our 2013 performance was, no doubt, disappointing. While this was partly driven by macro conditions, such as the decline in birth rates since 2007 which has contributed to stagnating overall toy and baby industry sales, and the rapid growth of online shopping, we cannot blame these factors. We believe that several execution issues also impacted these results. Over the past several months, we have undertaken a comprehensive analysis and diagnosis of the business, and believe we have four main issues to resolve – improve the customer experience in-store and online, make progress on changing price perception, put disciplines back into inventory management, and right-size our cost structure on a global basis. We are encouraged that all of these foundational issues are firmly within our own control to fix, and our strategy will address these to improve the business over the short-term and put the company on track for the future.”

Mr. Mullany noted, “Our ‘TRU Transformation’ strategy is grounded in consumer research and customer insights, and is anchored by three guiding principles – Easy, Expert, Fair. Among our highest priorities will be to deepen our focus on the customer, build meaningful relationships through loyalty and targeted marketing programs, and improve the shopping experience both in-store and online. This will include putting more emphasis on the distinct needs of our customer base of new and expectant parents and gift-givers. We are committed to delivering on our mission to bring joy into the lives of our customers by being the toy and juvenile products authority and definitive destination for kid fun, gift-giving solutions and parenting services.”  

For 2014, the objective of “TRU Transformation” will be to slow the company’s sales decline, stabilize cash flow and improve EBITDA to effectively position the business to grow revenue and profits in 2015 and beyond. “TRU Transformation” will focus on four key priorities:

To learn more about “TRU Transformation,” please visit the company’s corporate website, Toysrusinc.com, where it has posted presentation materials.

About Toys“R”Us, Inc.

Toys“R”Us, Inc. is the world’s leading dedicated toy and juvenile products retailer, offering a differentiated shopping experience through its family of brands. Merchandise is sold in 873 Toys“R”Us and Babies“R”Us stores in the United States and Puerto Rico, and in more than 715 international stores and over 180 licensed stores in 35 countries and jurisdictions. In addition, it exclusively operates the legendary FAO Schwarz brand and sells extraordinary toys in the brand’s flagship store on Fifth Avenue in New York City. With its strong portfolio of e-commerce sites including Toysrus.com, Babiesrus.com, eToys.com and FAO.com, it provides shoppers with a broad online selection of distinctive toy and baby products. Headquartered in Wayne, NJ, Toys“R”Us, Inc. employs approximately 70,000 associates annually worldwide. The company is committed to serving its communities as a caring and reputable neighbor through programs dedicated to keeping kids safe and helping them in times of need. Additional information about Toys“R”Us, Inc. can be found on Toysrusinc.com. Follow Toys“R”Us, Babies“R”Us and FAO Schwarz on Facebook at Facebook.com/Toysrus, Facebook.com/Babiesrus and Facebook.com/FAO and on Twitter at Twitter.com/Toysrus and Twitter.com/Babiesrus.

Forward-Looking Statements

All statements that are not historical facts in this press release, including statements about our beliefs or expectations, are forward-looking statements.  These statements are subject to risks, uncertainties and other factors, including, among others, the seasonality of our business, competition in the retail industry, changes in our product distribution mix and distribution channels, general economic factors in the United States and other countries in which we conduct our business, consumer spending patterns, our ability to implement our strategy including implementing the strategy described above and initiatives for season, the availability of adequate financing, access to trade credit, changes in consumer preferences, changes in employment legislation, our dependence on key vendors for our merchandise, political and other developments associated with our international operations, costs of goods that we sell, labor costs, transportation costs, domestic and international events affecting the delivery of toys and other products to our stores, product safety issues including product recalls, the existence of adverse litigation, changes in laws that impact our business, our substantial level of indebtedness and related debt-service obligations, restrictions imposed by covenants in our debt agreements and other risks, uncertainties and factors set forth in our reports and documents filed with the Securities and Exchange Commission (which reports and documents should be read in conjunction with this press release).  In addition, we typically earn a disproportionate part of our annual operating earnings in the fourth quarter as a result of seasonal buying patterns and these buying patterns are difficult to forecast with certainty.  We believe that all forward-looking statements are based on reasonable assumptions when made; however, we caution that it is impossible to predict actual results or outcomes or the effects of risks, uncertainties or other factors on anticipated results or outcomes and that, accordingly, one should not place undue reliance on these statements.  Forward-looking statements speak only as of the date when made, and we undertake no obligation to update these statements in light of subsequent events or developments unless required by the Securities and Exchange Commission’s rules and regulations.  Actual results and outcomes may differ materially from anticipated results or outcomes discussed in forward-looking statements.

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For more information, please contact:

Kathleen Waugh, Vice President, Corporate Communications at 973-617-5888, 646-366-8823 or waughk@toysrus.com

Jennifer Albano, Director, Corporate Communications at 973-617-5632 or Jennifer.Albano@toysrus.com