Toys R Us to Invade the Mall for Holidays

Toys R Us plans to invade the mall this holiday season, opening 600 temporary "Express" stores in malls and other shopping centers around the country, more than six times last year's count, and hiring 10,000 seasonal workers.

The move is the latest in Toys R Us' attempt to capture more holiday dollars amid tough competition from online retailers and mass merchants such as Walmart and Target. It also fills a gap in shopping malls created when KB Toys, which had been the largest mall-based toy seller, went out of business in 2008.

"We've been very aggressive during the economic downturn, and this is another aggressive action," CEO Jerry Storch said. "During the holiday season, mall traffic ramps up, and this will allow customers to purchase fill-in toys," when they are at the mall already, he said.

Toys R Us opened 90 standalone pop-up stores last holiday season. The company has been working on the plan since last year.

Storch said the company was pleased with the results of the pop-up stores last year, so the question became "'How big can we make this?"'

While Storch won't disclose how much the initiative will cost, he said the capital investment is small, and more money will be spent on hiring and training employees.

The Toys R Us "Express" stores began opening in June and will continue to open through November. About 300 opened during the summer. Most will close in January, but some could become permanent outlet stores. Several of the temporary stores opened last year remain open as outlet stores.

Toys sales traditionally hold up well during tough economic times because parents cut spending on themselves rather than their children. In Toys R Us' most recent quarter, the company reported a loss because of higher costs, but revenue rose more than 5 percent to $2.61 billion.

Toys R Us has used the weak economy to grow by acquiring smaller toy retailers. In 2009 it acquired pricey toy seller FAO Schwarz and internet sites eToys.com, babyuniverse.com and toys.com.

The company, based in Wayne, N.J., operates 587 big-box stores, mainly standalone stores in shopping centers, and about 261 Babies R Us stores nationwide.

The privately held company said in late May that it plans to go public by raising as much as $800 million in an initial public offering that would be one of the biggest retail IPOs in years.

But on Wednesday, Storch declined to say when an IPO might occur.

"That's not something that we can predict, it depends on a variety of factors including the health and stability of the markets," he said.