Toys R Us Inc. will close 14 stores in Southern California as the toy retailer looks to emerge from bankruptcy proceedings and better compete with lower-priced retailers.
The Wayne, N.J., company said it plans to close up to 182 stores nationwide, which includes both Toys R Us and Babies R Us locations, including 27 total in California, pending court approval.
Store-closing sales are expected to begin in early February, with the majority of closures to happen in mid-April.
“The actions we are taking are necessary to give us the best chance to emerge from our bankruptcy proceedings as a more viable and competitive company that will provide the level of service and experience you should expect from a market leader,” Dave Brandon, Toys R Us’ chief executive, said in a blog post released Tuesday night.
The company filed for Chapter 11 bankruptcy protection in September.
Although its numbers have been shrinking, Toys R Us still sells about 20% of the toys bought in the U.S., according to Stephanie Wissink, an analyst at Jefferies.
Competitive pressures will force the company to take a close look at all of its stores, and it probably will shut more in the next year or two, Wissink said.
Analysts have said that to compete with big-box chains such as Wal-Mart Stores Inc. and Target Corp. and with e-commerce giant Amazon.com Inc. — which offer a wide selection at lower prices — Toys R Us needs to improve its store experience and its website, and that it must hire well-trained employees who are knowledgeable about the products.
Brandon said in the blog post that the company recently relaunched its price-match program and would take “additional steps to ensure that we provide greater overall value” through promotions, an improved loyalty program and more personalized modes of customer communication.
Toys R Us said it also plans to convert about a dozen locations into co-branded Toys R Us and Babies R Us stores.
The company’s struggles have rippled outward, hurting its suppliers. Rumors continue to swirl around the possibility of a merger between Mattel Inc. and Hasbro Inc., the nation's largest toy makers. Wissink estimated that Toys R Us accounts for about 11% of Mattel's annual sales and about 9% of Hasbro's.
Toys R Us operates 881 Toys R Us and Babies R Us stores nationwide, including in Puerto Rico and Guam.
The Los Angeles County stores that are slated to be closed are:
City of Industry: 1600 S. Azusa Ave.
Santa Clarita: 26573 Carl Boyer Drive
Torrance: 20120 Hawthorne Blvd.
West Covina: 960 Lakes Drive
The other California stores slated for closure are: