By Maria Armental
Toys "R" Us Inc. said its strategy of more disciplined
promotions and pricing led to a decline in sales at existing U.S.
stores this holiday season but better profitability.
The toy retailer said sales at existing U.S. stores fell 5%
during the recent holiday period. Despite the sales decline, Toys
"R" Us said it saw an increase in gross margin dollars in its
domestic segment.
"These results reflect the successful execution of our strategic
plan to rationalize promotions, slow sales decline and improve
margin for fiscal 2014," said Antonio Urcelay, chief executive of
Toys "R" Us.
Including overseas results, Toys total same-store sales fell
2.7% during the holiday period.
The privately held retailer has struggled to hold its position
amid stiffer competition from the likes of Wal-Mart Stores Inc. and
Amazon.com Inc. Last year, it swung to a loss on write-downs and
falling sales in the U.S. and abroad.
In response, Toys "R" Us launched a series of changes, including
cutting the number of promotions and remodeling stores. Stores, for
example, added prominent displays featuring popular toys and gifts
under $30 to help drive sales.
In September, the company touted the changes saying it had
recorded sales growth in the U.S. for the first half of the year on
a same-store basis.
Based in Wayne, N.J., Toys "R" Us was bought in 2005 by Vornado
Realty Trust and private-equity firms Bain Capital and Kohlberg
Kravis Roberts & Co. for $6.6 billion.
Write to Maria Armental at maria.armental@wsj.com
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