retail

Toys R Us Targets Tweens With Claire's Combo

In the midst of a sweeping turnaround, Toys R Us is tapping a new segment for sales growth: Tween girls and their never-ending need for new bijoux and baubles. The retailer is partnering with Claire's, the world's leading retailer of glittery barrettes.

After a successful test in Europe, the two chains have announced a strategic global partnership to create 100 branded Claire’s shops in European Toys R Us stores, as well as 12 in the U.S.

“Toys R Us has been working for some time to improve the appeal of its product offering for tween girls,” says Sean McGowan, managing director of Equity Research for Needham & Co., who follows the Wayne, N.J.-based toy company. “It has sold private-label goods under the Totally Me brand, for example. But selling Claire's merchandise probably makes it more appealing to a young consumer (or her mother) since it doesn't have the issue of being so closely associated with very young kids and babies.”

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The company says it expects the partnership to evolve over time, and that the first of the U.S. stores are opening this week at its flagship Toys R Us Times Square and FAO Schwarz stores in New York City. (So far, larger shop sites are the only ones that will also offer ear-piercing services.)

The brands say marketing support includes targeted email, social media and store signage.

While sales have been rising at the struggling company -- which is in the midst of a sweeping transformation plan -- it posted a larger loss in its most recently quarterly results, fueled by deep discounts as it tries to clear excess inventory. Although sales for that period rose 2.7% to $2.4 billion, with same-store sales gaining 1.5%, its net loss widened to $148 million, from $113 million in the comparable period of the prior year.

Separately, Toys R Us released its 2014 Holiday Hot Toy List, with a total of 36 items. The “Fabulous 15,” which it predicts will the season’s most clamored-for toys, including Disney Frozen Snow Glow Elsa from Jakks Pacific; Doc McStuffins Get Better Talking Mobile from Just Play; Little Live Pets Bird Cage Love Birds Double Pack from Moose Toys, and Teenage Mutant Ninja Turtles Stretch ‘N’ Shout Leonardo from Playmates Toys.

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