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RetailBlack Friday

Toys ‘R’ Us says early Black Friday demand is strong

By
John Kell
John Kell
Contributing Writer and author of CIO Intelligence
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By
John Kell
John Kell
Contributing Writer and author of CIO Intelligence
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November 28, 2014, 10:45 AM ET
Shoppers Inside Toys R Us Inc. Stores Ahead Of Black Friday Sales
Toys R Us Inc. signage is displayed outside the company's store ahead of Black Friday in New York, U.S., on Thursday, Nov. 27, 2014. An estimated 140 million U.S. shoppers will hit stores and the Web this weekend in search of post-Thanksgiving discounts, kicking off what retailers predict will be the best holiday season in three years. Photographer: Peter Foley/Bloomberg via Getty ImagesPhotograph by Bloomberg — Getty Images
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Toys “R” Us said it is seeing strong early demand for the Black Friday weekend, with more than 2,000 shoppers lined up outside the toy retailer’s flagship Times Square store on Thanksgiving and hundreds lines up at other stores across the nation.

“We really liked opening at 5 P.M.,” said Hank Mullany, president of Toys ‘R’ Us in the U.S. “We did it a year ago and did it yesterday and the consumer response was overwhelmingly positive.” He added that the retailer was seeing consumers “shopping the entire store, not just shopping our specials.”

The holiday period is make-or-break for Toys “R” Us each year, as roughly 40% of the company’s sales are derived in the final quarter of the year, which runs from November through January. Toys “R” Us has sought to improve signage at its stores to make it easier to shop, as well as roll out a slew of initiatives meant to make shopping easier for casual shoppers and those with a shopping cart full of toys.

But Toys “R” Us also faces a lot of competition. Wal-Mart (WMT), Target (TGT) and Amazon.com (AMZN) are some of the retailer’s top competitors and they can count on door busters that go beyond the toy category to help lure shoppers.

Mullany declined to provide a prediction as to how this holiday season would compare to last year, but said the retailer was “off to a strong start” and should benefit from lower gas prices and better employment trends.

When asked about the hottest toy categories this year, Mullany called out one trend he describes as “Lights, cameras, toys” — indicating the popularity of toys from hit films like “Frozen,” “Transformers” and “The Lego Movie.” He said Toys “R” Us exclusives were among the hottest selling items, a nod to the retailer’s strategy to offer some unique items to stand out from the crowd.

One line that all retailers are clamoring to stock is “Frozen,” and Toys “R” Us said it has about 300 items based on the hit property. While that’s a lot of stock, Wal-Mart says it has even more (over 700 items, including Band-Aids, mouthwash and scooters). Wal-Mart claims it has more “Frozen” gear than any other retailer, a savvy move considering “Frozen” topped Fortune‘s top 5 holiday gift list for this year.

Another retailer poised to benefit from “Frozen” is Walt Disney’s (DIS) own brick and mortar stores. The media giant, which owns the property, has 213 of those stores in North America and executives there say there were 100 people or more in line across all of its stores before they opened on Thanksgiving evening.

“We have been really pleased about how the selling season has been going and are really optimistic about it,” said Elissa Margolis, senior vice president of the Disney Store chain in North America. Margolis said the Disney stores have reported rising same-store sales for nine consecutive quarters.

Beyond Frozen, Margolis said it saw a balanced mix of toys, sleepwear and other gear being purchased early in the holiday shopping season. Meanwhile, Margolis said a line of plush stackable dolls called Tsum Tsum — which originated in Japan but is new to the U.S. market — has been hard to keep on shelves.

About the Author
By John KellContributing Writer and author of CIO Intelligence

John Kell is a contributing writer for Fortune and author of Fortune’s CIO Intelligence newsletter.

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