Worrying times for Toys R Us as high sales don’t translate into high profits. Hopefully the Jedi Knight in shining armour of new Star Wars products is about to come over the hill to help out.
The struggling UK economy has seen Toys R Us enter the red in the latest set of accounts for its 79 British stores.
A pre-tax loss of £2.6?million in the year to 28 January 2012 was reported on a turnover of £476?million, down from a profit of £9.9?million the previous year. Directors are blaming a 6.6% decline in sales as well as the tough, competitive market for the loss.
Profits were wiped out by distribution costs, administrative expenses and £11?million in interest payments.
Toys R Us stores are mainly in out-of-town retail parks, but the company has opened several temporary ‘pop-up’ stores in shopping malls to take advantage of the busy Christmas shopping season.