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Toys R Us To Break Up Businesses

Wayne, — Toys R Us this morning said it will look to break up its component businesses in a massive restructuring as part of a bid to reduce operating costs, enhance their core potentials and “enhance shareholder value.”

Chairman and CEO John Eyler said the company is exploring the possible sale of its global toy business and will seek to spin-off its Babies R Us division. In anticipation of those ultimate results the company will begin operating each of the businesses as separate entities. Credit Suisse First Boston has been brought in as an advisor.

This is the latest in a series of fixes the company has recently embraced in order to restore its market position and profit margins against the onslaught of competitors like Wal-Mart, principally from the mass market. Among the initiatives announced this morning, the company will slash expenses at its headquarters and take more than $150 million in markdowns in the second quarter. Among the executives being shuffled in the restructuring are Babies R Us founder Richard Markee, currently vice chairman of the corporation and president of the U.S. toy division, who will become president and ultimately CEO of Babies R Us.

(Playthings is a TWICE sister publication that covers the toy industry.)

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