I might feel differently when I begin receiving those first charge card bills from Toys "R" Us, but I have to admit feeling proud and even a little relieved when I first heard that the giant retailer based in Paramus, N.J., was coming to Utah.
Proud because I always feel pride when a major company decides to expand into my home state and relieved because for years I have wondered what has been taking Toys "R" Us so long to get here.I mean we Utahns didn't exactly invent children but we've sure done our part. If I had been Toys "R" Us founder and chairman Charles Lazarus, I would have made a beeline to the Beehive State the minute I decided to take my show on the road.
Apparently, Lazarus didn't get the word that Utah is a natural toy market because it took him 413 toy stores in 42 states, 74 international stores and 154 Kids "R" Us clothing stores before he discovered us.
But now Toys "R" Us is on the way with grand openings scheduled for Oct. 27 at stores in Murray and West Valley City and a third scheduled for Ogden.
The Murray store, at the site of the former Gibson's discount store, will devote 46,000 square feet to the toy store and an adjacent 22,000 square-foot building will house Kids "R" Us, an affiliated children's clothing company that Lazarus launched in 1984 (Toys "R" Us was founded in 1957). The stores will employ 55-85 on a year-round basis and 100-275 during the Christmas season.
So what's the big deal? Well, Toys "R" Us is a serious national and international success story. The Japanese might make better VCRs than Americans, but we can still teach them a few things about retailing. Toys "R" Us is the world's largest toy retailer, a phenomenon both in the marketplace and on Wall Street.
Charts depicting Toys "R" Us sales, net income and growth of stores from 1975 to the present look like the space shuttle blasting into orbit; no jogs, no downward blips, no "corrections," just unbending lines heading straight up.
According to Gary H. Gilliard, Utah-Colorado general manager, Toys "R" Us stores feature a supermarket approach to selling toys, with wide aisles and merchandise stacked to the ceiling, a layout now familiar but one that Toys "R" Us pioneered.
There are many elements to the company's success story, Gilliard said, but he cites simplicity and uniformity as the key factors. Regardless of where the store is located, customers will always see the same interior layout. The game wall is in the same area, diapers are on the same shelves and video games, bicycles, dolls, computers, swing sets, sporting goods, scooters - 18,000 different items in all - are right where Toys "R" Us shoppers expect them to be.
"It helps customers feel at ease and (gives them) a sense of comfort in our stores," said Gilliard. It's a concept that McDonald's and other large chains have parlayed into global empires.
Business Week attributes the company's success to a simple formula: "Build self-service, supermarket stores that offer a vast selection, cut-rate prices, and a liberal return policy."
How big is Toys "R" Us? Net sales for the fiscal year ended Jan. 28 were $4.78 billion, a 19.7 percent increase over the $4 billion reported the previous year. Net earnings increased 20.6 percent to $321.1 million or $1.64 per share. More than 100,000 people work for the company during the Christmas season and each week, more than a million customers walk through Toys "R" Us doors, averaging 3,000 to 4,000 per store.
Lazarus' phenomenal career would make a credible Horatio Alger story. Discharged from the Army in 1948, he began selling children's furniture out of his father's bicycle shop in Washington, D.C. Customers asked him to stock toys, as well, and he soon found that the built-in obsolescence of toys made for brisker ongoing business than did furniture.
In 1957 he decided to concentrate on toys and opened Children's Su-permart. Upon seeing the sign over the door, however, he realized that name was kind of long and not very catchy. He changed it to Toys "R" Us and, in a small stroke of marketing genius, flipped the "R" over backwards, kindergarten style.
Expansion came slowly at first, as Lazarus opened only three additional stores over the next 10 years. Needing growth capital, he sold the business in 1966 for $7.5 million to Interstate Stores Inc., which then hired him to run it. Problems developed with other Interstate divisions and the company went into bankruptcy in 1974.
Lazarus regained control of Toys "R" Us in 1978 through a management buyout, led it out of Chapter 11 and has never looked back. Toys "R" Us now commands 25 percent of the U.S. toy market and its share is growing. In an interview with the New York Daily News last December, Lazarus said he intends to open another 300 stores in the U.S. by 1995.
"I like opening new stores," he said.