Arrow-right Camera
The Spokesman-Review Newspaper

The Spokesman-Review Newspaper The Spokesman-Review

Spokane, Washington  Est. May 19, 1883
Cloudy 32° Cloudy
News >  Business

At Toys R Us, hopes for a turnaround rest on a last-minute rush for holiday gifts

shoppers browse at a Toys R Us store in Miami. The national toy chain -- which filed for bankruptcy in September -- is hoping for strong Christmas sales to pull it out of a deep sales slump. (Alan Diaz / Associated Press)
shoppers browse at a Toys R Us store in Miami. The national toy chain -- which filed for bankruptcy in September -- is hoping for strong Christmas sales to pull it out of a deep sales slump. (Alan Diaz / Associated Press)
By Abha Bhattarai Washington Post

With just days left until Christmas, Marita Percival decided it was time to get serious.

So she called in sick to her job as a special-education teacher and headed to Toys R Us, searching for ideas for her 3-year-old daughter and hoping to finish her holiday shopping in one fell swoop.

“It’s coming down to the wire, so I literally woke up this morning and said, ‘OK, it’s time to shop,’” she said Tuesday morning as she filled her cart with Playdoh sets, a dollhouse, play tent and Mickey Mouse puzzle. She stopped to use her phone to scan Google reviews of an interactive puppy that responds to voice commands and poses for selfies. It had been marked down to $49.98 from $129.99.

“Looks good, ” Percival said as she added one more item to her cart.

Welcome to the final stretch of the holiday shopping season, as frantic shoppers and desperate retailers shift their focus to last-minute trips to the store. Nearly half of Americans have yet to finish their holiday shopping, according to a survey released Wednesday by the National Retail Federation.

It’s a critical time for retailers, too, as they duke it out for the last of shoppers’ budgets. Kohl’s stores are staying open around the clock from Thursday until Christmas Eve, while Nordstrom is offering 24-hour curbside pickup across the country.

The retail industry has had a tough year. Hundreds of companies have filed for bankruptcy, and many more have closed branches as they struggle to compete with such online giants as Some, including Target, have warned that holiday sales may not be as robust as they had hoped, and analysts say they are expecting it to be another challenging season for department store chains including Macy’s, Kohl’s, Nordstrom, J.C. Penney and Sears. (Jeffrey P. Bezos, the founder and chief executive of Amazon, owns The Washington Post.)

For Toys R Us, the run-up to the holidays is particularly important. The retailer filed for bankruptcy protection in September, right before a three-month period that typically accounts for nearly 40 percent of its annual sales. There have been reports that the company is considering closing at least 100 stores across the country as it looks to pay down $7.9 billion in outstanding debt.

This week brought more troubling news: Toys R Us reported an 8 percent sales drop for the period ending in September, contributing to a $623 million loss.

“Our results for the quarter were disappointing,” chief executive Dave Brandon said in a statement. “We recognize the need for change to better meet customers’ ever evolving shopping preferences.”

The company has added “Play Labs” to some of its stores, where children can test new toys, and created an augmented reality app that allows shoppers to play virtual basketball and other games while they’re shopping. But analysts said it will take more than one holiday season to turn things around.

On a recent weekday, the Toys R Us store in Falls Church, Virginia, was humming with shoppers, but there was no long wait at the cash registers.

Ariel Sandy, of Woodridge, Virginia, offered one explanation. He had done much of his shopping online and only came to the store to pick up last-minute puzzles for his children, ages 5, 15 and 18. Mary Blair, of Annandale, Virginia, said she, too, shopped online but decided to bring her 9-year-old son, Holland, to pick out a present for his 6-year-old brother.

“I’ve actually never been to Toys R Us before, which is crazy because I have three boys under 10,” she said.

Bankruptcy experts said the company’s future will largely depend on whether it can persuade its suppliers to keep shipping their products.

Mattel – the maker of Barbie, Fisher-Price and American Girl – said the Toys R Us bankruptcy was mostly to blame for a 13 percent drop in global sales during the most recent quarter. Others toymakers, including Hasbro and Jakks Pacific, have also begun fretting about what might happen if the major distributor stumbles.

“I don’t want to be doom and gloom, but this is a critical time for Toys R Us,” said Katherine Waldock, a finance professor at Georgetown University.

This week, the retail giant rolled out a number of discounts aimed at attracting last-minute shoppers: 20 percent off all Power Rangers action figures, 50 percent off Sofia the First preschool toys, buy-one-get-one 40 percent off deals on Crayola and Nerf products.

But those promotions didn’t matter much to Christian Woods of Washington, D.C., who said his trip to Toys R Us was fueled by equal parts desperation and nostalgia. He needed gifts for his 7-year-old cousin, so he picked the largest toy store he could find.

“A lot of these gifts are spontaneous, so we wanted to come somewhere where we could look around,” he said. “This is a clean sweep. We get everything in one go.”

Next to him, his uncle pulled up screenshots he’d taken on his phone of the year’s hottest toys. Their cart was overflowing with an interactive tiger, a children’s smartwatch, Barbies, books and board games. They stopped to check out a play kitchen.

“This is a total blast from the past,” Woods added. “I haven’t been to Toys R Us in – man, I don’t even know how long.”

For decades, Toys R Us, based in Wayne, New Jersey, was the country’s pre-eminent toy retailer, with a towering flagship in New York’s Times Square (now closed and home to Old Navy) and a ubiquitous icon, Geoffrey the Giraffe. But in recent years, it has struggled to keep up with big-box competitors, which often sell similar items for lower prices.

Take, for example, the T.J. Maxx down the street from the Toys R Us in Falls Church. There were mountains of toys and children’s books throughout the store. The Dr. Seuss book “Green Eggs and Ham” was selling for $6.99 (compared to $9.99 at Toys R Us), while Smithsonian microscopes were priced $14.99 ($27.99 at Toys R Us) and a 303-piece Lego set had been marked down to $11.99 ($21.99 at Toys R Us).

“There’s just no way anyone can compete with these prices, except for Amazon,” said Taylor Matzelle, 30, who was scanning the shelves for gifts for her children, ages 2 and 5. “I hate that we’re putting stores out of business, but shopping online is just so much easier.”

(There were practical reasons to buy online, too, she said: “When I bring my 2-year-old in here, he’s running around like, ‘Oh my God – I need all these toys’ and ripping open all the packages. It’s a nightmare.”)

Back at Toys R Us, it was 1-year-old Kaighn Fosmoe’s first trip to the toy store. Her parents said they weren’t quite sure what to get their toddler for Christmas, so they decided to bring her along.

“We wanted to see her reactions to all of the toys,” said her mother, June. “And we thought she could burn off some energy – you can’t do that online.”

Kaighn picked out a plush giraffe and an animal puzzle. She played with a giant crayon-shaped piggy bank and pressed the buttons on a light-up school bus.

A few aisles away, Rachel Mohammed was picking out presents for her 8-year-old son, whose wish list included just three items: Money, a dog and a sister made of gold.

“None of those were possible,” she said, “so I came to Toys R Us instead.”

The Spokesman-Review Newspaper

Local journalism is essential.

Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are not tax deductible, but are predominately used to help meet the local financial requirements needed to receive national matching-grant funds.

Active Person

Subscribe to the Coronavirus newsletter

Get the day’s latest Coronavirus news delivered to your inbox by subscribing to our newsletter.