TOYS 'R' US NEARING DECISION ON A SPLIT
February 22, 2005 -- NEWARK, N.J. —
Don't wave goodbye to Geoffrey just yet.
The cartoon giraffe mascot of Toys 'R' Us Inc. may still be around after the nation's No. 2 toy retailer splits its struggling global toy business from its burgeoning Babies R Us stores.
At least, that's the best assessment of industry observers, who have waited a half-year so far to see exactly how the company will be divided.
"They will spin off the Babies R Us business, and somebody, an investor or somebody, will buy the global toy business," said Chris Byrne, and independent consultant.
The toy business will probably continue under private ownership, he said. "I don't think they will liquidate it for the real estate. I think there's too much brand equity in the Toys 'R' Us name," Byrne said, adding that Toys 'R' Us offers many services that competitors don't.
"They can be that resource for mom and dad. They have more to offer than the big boxes," such as Wal-Mart, the No. 1 toy seller, and Target, he said.
Those discount stores, he said, focus mainly on hit items. "They really are all about moving merchandise," Byrne said. "There are two very different business models, and there's room for both."
Don't wave goodbye to Geoffrey just yet.
The cartoon giraffe mascot of Toys 'R' Us Inc. may still be around after the nation's No. 2 toy retailer splits its struggling global toy business from its burgeoning Babies R Us stores.
At least, that's the best assessment of industry observers, who have waited a half-year so far to see exactly how the company will be divided.
"They will spin off the Babies R Us business, and somebody, an investor or somebody, will buy the global toy business," said Chris Byrne, and independent consultant.
The toy business will probably continue under private ownership, he said. "I don't think they will liquidate it for the real estate. I think there's too much brand equity in the Toys 'R' Us name," Byrne said, adding that Toys 'R' Us offers many services that competitors don't.
"They can be that resource for mom and dad. They have more to offer than the big boxes," such as Wal-Mart, the No. 1 toy seller, and Target, he said.
Those discount stores, he said, focus mainly on hit items. "They really are all about moving merchandise," Byrne said. "There are two very different business models, and there's room for both."
