US: Toys R Us hints at return to New York City

Toys R Us could be making its return to New York City with a smaller ‘urban model’ at the forefront of its stores’ plans.

Last year, the toy giant closed both its famed FAO Schwartz store and iconic Toys R Us flagship location in Times Square, citing the two locations as money losers.

The firm indicated that stores the size of its flagship location can’t always afford to be profitable, particularly within an industry where orders and margins are too thin to make money.

However, in a recent interview with Fortune, Toys R Us CEO David Brandon has hinted that a return to New York City – where the firm operates just a single Babies R Us store currently – could be on the cards.

Brandon said that if the Toys R Us brand does make its return to the island of Manhattan, it won’t look like it did in the past, with smaller locations being the likely option in an ‘urban model’ that mirrors the firm’s operations in China.

Operating in a competitive $19.4 billion US toy market and competing against the likes of Walmart and, Brandon has revealed that Toys R Us generates around $1.4 billion in annual revenue through its online store.

However, he has admitted that the business should be double or triple that size.’

Brandon has stated that the synergy between online and brick and mortar sales means that with an increased presence in New York City, he would expect to see online sales grow.

“They work together,” he said, adding that online sales are stronger when there is a physical store in the neighbourhood.

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