TRENTON, N.J. — Toys R Us Inc. said Monday it planned to close 64 U.S. stores and cut 1,900 jobs, or about 3 percent of its work force, in a drive to cut costs and boost operating profits.
The retailer of toys and children's apparel has said that the slumping economy, extensive remodeling costs and fallout from the Sept. 11 terrorist attacks had contributed to its recent earnings slump.
The layoffs include about 1,350 people from the stores being closed and about 550 from support services. Toys R Us has about 70,000 permanent employees worldwide.
"The senior management and the middle management all agree it's time to become much more professional, much more streamlined," said John Eyler, chairman and chief executive, in a conference call with analysts.
Toys R Us, the second-biggest U.S. toy retailer after Wal-Mart Stores, also said it was testing new concepts, such as selling groceries or apparel for kids and babies along with toys.
The company will close 27 Toys R Us and 37 Kids R Us stores, though most of those will combine with nearby Toys R Us stores. Kids R Us sells children's clothing and bedroom furnishings.
The company did not identify which stores would be closed, partly because employees were being notified, said Louis Lipschitz, chief financial officer.
The company said it would take a $213 million pretax restructuring charge in its fiscal fourth quarter ending Feb. 2. The company had a third-quarter loss of $44 million, or 22 cents per share.
The company said the cuts would boost pretax earnings by approximately $25 million in 2002 and approximately $45 million annually beginning in 2003.
Toys R Us operates 1,609 stores, including 703 toy stores in the United States, 510 international toy stores, 184 Kids R Us stores, 163 Babies R Us stores and 49 Imaginarium stores.
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