Targeting the Next Generation of Toys 'R' Us Kids

If you think it's crazy to take your kids to a toy store, try going with Jerry Storch. He moves at warp speed through a Toys "R" Us superstore in Elizabeth, N.J., pointing out the "hottest" toys of the season, declaring one toy "hot" and another "on fire."

Storch may sound like the chief toy tester, but he's actually a chief executive on a mission. A mission, he says, to save an American retailing icon. Storch took over as the CEO of Toys "R" Us in February 2006.

"You can't even watch a movie. I was watching a movie the other day with Bruce Willis, the latest 'Die Hard,' and he flashes his badge and the fellow asks him, 'Where'd you get that, Toys "R" Us?'"

Storch says the Toys "R" Us brand "is everywhere," and the company needs to capitalize on that sense of familiarity.

"Parents have a huge soft spot in their hearts for Toys "R" Us," he said. "It's up to us to fulfill that promise of that brand icon."

A catchy jingle, a jolly giraffe named Geoffrey and discount prices made Toys "R" Us America's toy store for a generation. But like other competitors, it became a victim of the super discounter Wal-Mart, now the largest toy seller in the country.

'We're Always Children'

Parents started complaining about dirty stores, messy aisles and a lack of customer service.

"We did it to ourselves," Storch acknowledged. "It's very easy to develop a victim culture in a company just like any organization, and when I came here what I heard was, 'It is impossible to succeed because the discounters were too strong.'"

Storch showed up at Toys "R" Us after it had become clear he wasn't going to get the top job at Target. At Toys "R" Us, he found a company in trouble, but rather than shut it down, he wanted to fix it, to rebuild the brand.

Toys "R" Us operates a lab at company headquarters that is set up like a store -- part of what Storch calls "the science of retailing."

"A big part of retailing is to make it easier for the customer to find what they want and to stimulate add-on purchases when something belongs together," he explained.

Storch has made little changes (mopping twice as often a day) and big changes like rejoining Babies "R" Us and Toys "R" Us stores. They look as if they're side by and have two separate doors, but inside it's one superstore.

"Look, you go right from babies, this is the baby world, everything you could ever want," Storch explained, giving "Nightline" a tour. "And then you come right into the toys for a baby. These are infant toys, right, and as you go to the next aisle older, older, older … you've got the entire toy story. All the way from zero to [a] video game player who's age 30 -- you know, we're always children."

Surviving the Recalls

Is this just a gimmick? Not according to retail watchers, who are taking notice. In a slowing economy, Toys "R" Us is growing, despite the turmoil of a toy business in which retailers have been forced to pull millions of recalled toys from shelves.

"We've told the toy makers that it's absolutely intolerable for them to manufacture toy products that do not meet our specifications," Storch said. "We've terminated two vendors already this year. We've had some very tough conversations with the others -- you can believe that. And we've stiffened our standards even more."

"If it's someone we have confidence in and we know they can do something about it, then we'll stick with them and help make sure they make better product," he said.

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