Posted: Monday, January 28th 2002 at 9:44am
Toys R Us to close 64 stores, cut 1,900 jobs
PARAMUS, N.J. - Toys R Us Inc. plans to cut 1,900 jobs and to close 27 Toys R Us stores and 37 Kids R Us stores in a drive to cut costs and boost its operating profits.
The toy and childen's apparel retailer said Monday it will take a $213 million pretax restructuring charge as a result of the moves in its fiscal fourth quarter ending Feb. 2.
The company has said the slumping economy, extensive remodeling costs and fallout from the Sept. 11 terrorist attacks have contributed to its recent earnings slump.
The layoffs would be from domestic stores, the company said. It did not immediately provide a current total of employees.
The company said the cuts would increase cash flow in 2002 and beyond and boost pretax earnings by approximately $25 million in 2002, and approximately $45 million annually beginning in 2003. Payroll savings associated with changes in support functions would account for $30 million of the $45 million.
Toys R Us had a third-quarter loss of $44 million, or 22 cents per share. For the first nine months of its fiscal year, the company posted a loss of $91 million, or 46 cents per share.
Toys R Us operates 1,609 stores, including 703 toy stores in the United States, 510 international toy stores, 184 Kids R Us children's clothing stores, 163 Babies R Us stores and 49 Imaginarium stores.
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