Toys R Us
will close 64 stores and cut about 1,900 positions to reduce costs.
The company will shut 37 Kids R Us stores and 27 Toys R Us stores, recording a $126 million after-tax charge in its fourth quarter. The retailer expects the actions to boost pretax earnings by $25 million in 2002 and $45 million annually starting next year.
The Toys R Us stores being closed are among those that weren't converted to the chain's "Mission Possible" format, an initiative that included designing stores like racetracks and featuring themed areas. The company said the stores pegged for closure were cash flow positive but "not meeting our return objectives." It said 10% of them are candidates for relocation.
The company also disclosed plans to streamline corporate administration and financial functions, including the consolidation of five separate support locations in New Jersey.