E-commerce helps Toys ‘R’ Us post holiday sales gains
January 8, 2016 02:46 PM
Based on the results of the 2015 holiday season, Toys ‘R’ Us Inc. landed on shoppers’ “nice” list.
The retail chain, No. 40 in the Internet Retailer 2015 Top 500 Guide, reported same-store sales gained 3.7% for the five-week period of Nov. 29-Jan. 2, compared to the comparable period in 2014. That period starts the Sunday after Thanksgiving and includes Cyber Monday, the Monday after Thanksgiving.
For the nine-week period of Nov. 1 through -Jan. 2 Toys ‘R’ Us reported same-store sales gains of 2.0% over the same time in 2014. This is the first time in four years that Toys ‘R’ Us has generated year-over-year sales gains during the holidays.
Toys ‘R’ Us did not break out online sales figures in its holiday statement, however it cited e-commerce as a growth driver throughout the holiday shopping season. Online sales gains during the 2015 holiday shopping season may have been helped by the fact that the retail chain lowered its free shipping threshold for online orders in September to a minimum order of $19 from $49.
“We successfully maintained a strong in-stock position on the hottest toys while offering customers competitive prices and an extensive merchandise assortment, both in stores and online,” CEO Dave Brandon said.
This holiday shopping season was the first since Toys ‘R’ Us announced in July that it would bring its e-commerce operations in-house. The retailer plans by mid-summer to be operating internally to have all its e-commerce sites, which include ToysRUs.com, BabiesRUs.com and FAO.com.
Top500Guide.com data shows that Toys ‘R’ Us has grown its online sales steadily over the past five years, going from $782 million in online sales in 2010 to an Internet Retailer-estimated $1.2 billion in 2014, an average annual growth rate of 8.94%.
The retailer’s holiday gain came after declines the past three Christmas seasons, which added to doubts about the viability of the retailer in an industry rapidly shifting to online sales. Bain Capital Partners, KKR & Co. and Vornado Realty Trust acquired the chain a decade ago in a $6.6 billion deal and have struggled to take it public again.
The holiday season was the first under Brandon, who became CEO in July. Brandon ran Domino’s Pizza Inc., another Bain-owned company, for 11 years and guided it through an initial public offering in 2004. Since joining Toys ‘R’ Us, he has been revamping the management ranks, including eliminating the position of president of U.S. stores.
Bloomberg contributed to this story.