Toys ‘R’ Us Will Keep Holiday Hiring Unchanged, Boost TV Ads

Toys “R” Us Inc., the world’s largest toy chain, plans to hire the same amount of seasonal workers for the holiday season as last year, about 45,000, while also opening fewer temporary locations.

The number of so-called pop-up stores will be more than the 90 opened in 2009 and less than the 600 operated last year, Chief Executive Officer Gerald Storch said today during a presentation in New York. The retailer has cut these locations because rents aren’t as favorable and it’s added permanent stores since last year. The reduction isn’t because the retailer expects a decline in demand, Storch said in an interview.

“We can produce stronger results with fewer stores,” said Storch, who is also chairman of the company. “Most retail initiatives go through a period of learning until they get perfected.”

The retailer, based in Wayne, New Jersey, also plans to spend more money on advertising its exclusive toy lines to help it stand out from competitors such as Wal-Mart Stores Inc. (WMT) and Target Corp. (TGT) It hired an advertising firm to create commercials for three toys from partners. That was a first for the company, which had relied on toymakers for mentions in commercials. The company also mailed a catalog of 350 exclusive items this week.

The company, purchased by private-equity firms KKR & Co. and Bain Capital LLC along with Vornado Realty Trust (VNO) for $6.6 billion in 2005, declined to comment on its plans for an initial public offering.

In the quarter ended July 30, the retailer’s sales rose 3.2 percent to $2.65 billion. Sales at stores open at least 56 weeks in that period fell 2.2 percent, a drop Storch blamed on a decline in the video-game industry. The net loss was $34 million compared with a loss of $14 million a year earlier. Earnings before interest, taxes, depreciation and amortization, adjusted for some items, gained 16 percent to $162 million.

“Go back to 2005, 2006 and people had questions about our destiny,” said Storch, whose been CEO since 2006. “I believe we’ve exceeded expectations.”

To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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