Wayne, N.J. ? Toys “R” Us Inc., faced with fierce competition from discounters, particularly Wal-Mart Stores Inc., said Wednesday it was exploring the possible sale of its global toy business as it pursues separating its toy and baby product divisions.

The nation’s second-biggest toy retailer behind Wal-Mart said it would explore the possible sale of its worldwide toy business — both domestic and abroad, as well as its e-commerce division — and the possible spinoff of Babies “R” Us. It also plans to begin a substantial restructuring of its toy business as part of an effort to dramatically reduce operating and capital expenses.

John Eyler, chairman and chief executive officer, said the global toy and Babies “R” Us businesses were at “fundamentally different phases in their growth cycle,” and separation would give the baby business more opportunity to continue its healthy growth.

“Whatever form the separation takes, these steps should facilitate the execution of a restructured — and substantially leaner and more focused — global toy business that we believe can generate significant cash,” he said in a statement.

Toys “R” Us officials said they planned to “substantially restructure” the company’s Wayne, N.J., headquarters, but did not comment on whether that would include layoffs. The company has recorded severance and other related charges of approximately $14 million associated with this action in the second quarter of 2004, and additional charges will occur in subsequent quarters.

It plans to reduce its operating expenses in the corporate headquarters and U.S. toy business by more than $125 million by fiscal 2005 as compared to fiscal 2003.

Richard Markee, vice chairman of Toys “R” Us Inc. has been appointed president of Babies “R” Us and will become its chief executive officer and president once the companies separate. Jon Kimmins, Toys “R” Us treasurer, will become chief financial officer of Babies “R” Us, and John Barbour, currently president of Toys “R” Us International, will become president of U.S. toy stores.

Officials declined to answer questions about the news release, and said they would delay releasing their second quarter earnings until Aug. 23. The company had planned to release figures on Monday.

Shoppers enter the Toys R Us Kids World store in Elizabeth, N.J. They were shopping on Wednesday. Toys R Us Inc. said Wednesday it was exploring the possible sale of its global toy business as it pursues separating its toy and baby product divisions.