NEW YORK - Toys "R" Us, the retailer acquired by three buyout firms, will close 75 stores early this year and cut 3000 jobs after reporting a wider third-quarter loss.
The retailer will also convert 12 other locations into the Babies "R" Us format. It said the changes would result in US$155 million ($224 million) in pretax restructuring expenses. About US$99 million of the costs will be booked in the fourth quarter of the 2005 fiscal year.
The store closures are the first since the firm was bought for US$6.6 billion by a group including Vornado Realty Trust, which reviewed the company's business and operations.
Toys "R" Us had a third-quarter loss of US$126 million as customers shunned traditional toys in favour of electronics and Wal-Mart attracted shoppers with low prices.
Overall, US toy sales may have had their third straight annual decline because of weak holiday-season sales, Minneapolis-based Piper Jaffray & Co analyst Anthony Gikas wrote in a December 8 report.
The job cuts represent 11 per cent of the company's workforce, said Toys "R" Us spokeswoman Kathleen Waugh. Some employees might be offered positions in other locations.
New owners Kohlberg Kravis Roberts & Co, Bain Capital and Vornado were committed to Toys "R" Us staying in the toy business, acting chief executive Richard Markee said.
-BLOOMBERG
Toy chain shuts stores as kids find new playthings
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