Toys R Us has said it will look at further cost cutting opportunities, after confirming that its sales declined by 7.4 per cent last year to $12.5 billion, the lowest level since at least 2009.
Chief executive Antonio Urcelay told Marketwatch that 2014 is the year where Toys R Us stabilises its business and slows its rate of sales and profit decline. He said the company has two years to realise its strategic vision before key debt maturities are due.
He added that, while the retailer will identify cost cutting opportunities, he doesn’t see major store closings as part of the plan because 98 per cent of the company’s 862 US stores and 94 per cent of its 635 international stores are profitable.
Comparable store net sales for the full year 2013 were down 5.0 per cent in the domestic segment and 3.3 per cent in the international segment. The overall decrease mainly came from dips in the juvenile (including baby), entertainment (including electronics, video games hardware and software) and learning categories.
Urcelay said in an official statement: "It was a challenging year. The US business experienced the more significant downturn, primarily due to a decrease in net sales, margin pressure and one time items.
"Over the past several months, the team has been focused on developing our strategic plan, which we strong believe will address foundational issues needed to stablise the business over the short-term, while allowing us to implement new initiatives to put the company on track for profitable growth in the future. At the same time, we accelerated our expansion in China, where business has continued to be strong.
"We are also pleased that the 2014 fiscal year has started off well, with a 3.5 per cent comparable store net sales increase in the US amd a 0.2 per cent comparable store net sales increase in our international segment through the first seven fiscal weeks."