When Toys ‘R’ Us chairman and CEO Jerry Storch accepted LIMA’s Retailer of the Year award during the annual Licensing Show gala a few weeks ago, it was an indication that the venerable retailer is starting to show some results from its turnaround initiatives.
And certainly, only 17 months into his tenure, Storch was bursting with pride that the specialty toy retailer was being recognized for its efforts in licensing and merchandising and starting to distance itself from the recent problematic past.
Many retail and licensing execs clearly remember the many highs and lows of TRU over the past two decades from the growth years in the 1980s and early 1990s spearheaded by founder Charles Lazarus and president Michael Goldstein to the turnaround efforts under former FAO Schwartz executive John Eyler in the early 2000s.
Remember the entry into Japan in 1991, which was downplayed and criticized by many retail execs, and is now its largest international business with 167 stores and over $1.6 billion in sales?
Remember the opening of the showcase TRU Times Square Store as well as several other prototypes over the years and how innovative TRU was and how hard it tried to improve its store operations and consumer perceptions?
Remember the $6.6 billion acquisition of TRU in July 2005 by an investment group consisting of Bain Capital Partners LLC, Kohlberg Kravis Roberts & Co. (KKR), and Vornado Realty Trust that gave investors and industry execs new hope for the future?
Or how about the appointment in February 2006 of Target’s Storch, who arrived in Wayne, N.J., with a pedigree from the upscale discount retailer’s longstanding reputation and a huge challenge to save TRU?
So the Retailer of the Year Award reflects the early efforts of the new regime. It reminds everyone not only of the rich history of TRU but the fact that its global brand franchise is now being reestablished in many key areas including the following:
- Management. With more than 20 new executives from a cross-section of retail chains including Target, Best Buy, and Limited, TRU has demonstrated a commitment to the future by recruiting a top-notch “allstar” retail team.
- Licensing and merchandising. The exclusive and creative integration of licensing, merchandising, and marketing will be key to the turnaround and of course customer loyalty. The exclusive “Deal or No Deal” marketing program with licensing agency Endemol in October 2006 was a great example of the new thinking and integrated merchandising based on the popularity of the NBC game show. And last month’s debut of an exclusive Pokémon merchandising program was another example of the potential opportunities that exist.
- E-Commerce. As a global brand franchise, the Internet is a vital component for TRU and represents an opportunity for growth.
- International. A best-practices approach to global merchandising and licensing will create new opportunities and help improve performance.
- Store operations. The new management must improve not only the design and look of the stores with a more contemporary, fun environment, but service must also be improved in order to enhance the overall customer experience.
The recognition of TRU as Retailer of the Year does not mean that the turnaround is complete, but it is a sign that the chain is moving in the right direction.