This is a partial transcript from Your World with Neil Cavuto, January 28, 2002. Click here for complete access to all of Neil Cavuto's CEO interviews.
NEIL CAVUTO, HOST: Some big changes going on at Toys "R" Us; 1,900 workers are going to be getting their pink slips and its shutting down about 69 stores. What is going on here?
Let's ask John Eyler. He is the big cheese over at Toys "R" Us. John, good to have you.
JOHN EYLER, CHAIRMAN & CEO, TOYS "R" US: Hey, Neil.
CAVUTO: Shake-up, bad times, what?
EYLER: No. We had a solid holiday season that reaffirmed both the Toys "R" Us and the Kids "R" Us strategies. And these are the remaining stores out of almost 1,000 stores between the two models that we just don't feel are appropriate to invest in. And so we are going to be eliminating those stores.
CAVUTO: Normally when you do that kind of thing, I mean, you've been firing on all cylinders here. People interpret, oh, what's going wrong.
EYLER: It really is a logical conclusion. Take toys for instance. We've already remodeled 433 stores. As we do the last 270 this year, we concluded that 27 just didn't make sense to invest in. Now 10 of them are just in the wrong location. So we'll close those. We'll build 10 new ones to take their place. But 17, which is about three percent of the total, just about lived their usefulness and so we are going to clean them up.
CAVUTO: Now are these new stores going to be the mega-variety or how would you describe them?
EYLER: These new stores are what we'd call mission possible. We built 270 of them this last year. That group of stores, take all 270, they picked up 9.2 percent year over year in the month of December.
CAVUTO: These are the renovated or redone stores?
EYLER: Absolutely. We are just completely in that strategy. This is the third year of a three-year conversion of the chain.
CAVUTO: This, you know, it's interesting. I mean, when you look at some of the big ones like the world's biggest now, the one in Times Square with the ferris wheel and the whole nine yards.
Now, a lot of people interpreted these remarks today when you announced these cutbacks as, wait a minute, maybe people are cutting back spending on kids. Maybe the robust market for buying toys isn't what we thought it was. How do answer that?
EYLER: Oh, not at all. I think if you look at our December results, and if you take a look at the remodeled stores picking up 9.2 percent, you take a look at our international stores picking up over six for the nine weeks and you take a look at the nine prototypes for kids which have been running serious double digits for a full year now, that's why we're investing in doing 30 more of the kid's stores, almost 250 more of the toy stores this year.
So these are strategies that are proven. Today's adjustments are, first of all, to take a small handful of stores that just aren't productive, and secondly, to consolidate our central offices. We've got five different buildings scattered over New Jersey and this will allow us to pull them all together, one building. The savings in payroll is more than $30 million a year.
CAVUTO: All right. John, always a pleasure. Thank you very much.
EYLER: Good to see you, Neil.
CAVUTO: John Eyler is the Toys "R" Us chairman and CEO.
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