Staubach Leads Toys "R" Us Disposition Strategy

The portfolio disposition group of Dallas-based Staubach Co. has been hired to steer the sales. A Toys "R" Us contact tells GlobeSt.com that the plan is to "dispose of the locations as soon as it is reasonably practical." And naturally, market conditions will dictate the process.

Sixteen of the locations are available now, with others as far out as March 2003.The chain's "to go" list includes 43 Kids "R" Us, three Babies "R" Us and the balance Toys "R" Us. Some cities have been ticketed for "combo" stores and thus the need to vacate and head into larger accommodations. There are 273 combo stores in the network, but that will jump to 375 before yearend.

The chain's contact emphasizes no market is being exited in the nationwide strategy to mix up its mix of 1,596 retail locations of the four-brand chain. No Imaginarium stores are on the disposition roster.

Houston is earmarked for six shutdowns, two of each brand, while Texas overall is losing 15 of its 55 stores. Austin, long considered "under-retailed" by the industry, is the only Texas Big Four not to lose a store. Staubach's Ron Strongwater, executive vice president, is leading the nationwide disposition team.

In a press release, Toys "R" Us executive vice president of operations and general counsel, says individual marketing strategies will be employed as the team scouts for space takers. The Paramus, NJ-based chain announced the disposition plan in late January and immediately set about screening brokerage house proposals.

The shutdown is part of a restructuring that will eliminate 1,900 store and headquarters jobs and consolidate store support facilities. The chain's contact was unable to provide information about distribution centers that will be shuttered. The press release says five New Jersey sites will be rolled into a new facility in Wayne, NJ, which begins with a transitional move-in this summer and full delivery in summer 2003. The restructuring resulted in a $126-million after-tax charge in fourth quarter 2001, according to the company's release.