Toys ‘R’ Us Asia slashes expansion plan on recession

Toys ‘R’ Us Asia has announced it has scaled back expansion plans for 2009 and suspended entering new markets because it expects demand to drop further amid the global recession. The company plans to cut new store openings to seven from as many as 30, and will shut six underperforming outlets, Pieter Schats, Chief Executive Officer for Toys ‘R’ Us Asia, said. It opened 40 outlets this year. Same-store sales have dropped by as much as 8% so far in December, its peak month. “It’s a hell of a hit,” Schats said. “People’s discretionary spending will be significantly curtailed next year. During these times you have to take a real hard look at store performance.” Sales at Toys ‘R’ Us Asia’s outlets in Hong Kong, Singapore and Kuala Lumpur have been “hit quite hard by the lack of tourism and business travel,” Schats said. To boost sales, the company has offered discounts of up to 50% on as many as 70 items “as people are looking for value”. “Christmas is still the biggest period despite the downturn,” he said in an interview with Bloomberg TV. “You’ve got to focus on getting through that, getting to the right level of stocks and good offers.”

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