New CEO Looks to Storch TRU’s Competition
By George Anderson
Gerald Storch has a new job. The former vice chairman of Target is the new chairman and chief executive officer of Toys R Us.
Mr. Storch, who has a reputation for saying exactly what is on his mind (he once called Wal-Mart a company of “vicious predators”) joined Target in 1993 as senior vice president of strategic planning and helped the company become a major force in retailing. Before he left the company last year, it was widely assumed he was the CEO-in-waiting at Target.
In his new role, Mr. Storch will be charged with taking back some of the business lost to the previously described “vicious predator,” but also his former employer.
Sean McGowan, a toy analyst at Harris Nesbit, said that while Wal-Mart Stores Inc. has the biggest market share, Target is probably more of a direct competitor to Toys R Us.
“I don’t know Storch, but I think Target has done an excellent job in toys,” he told The Associated Press.
Toys R Us has continued to lose sales and market share in recent years. According to a Dow Jones report, the toy chain saw sales go from $7 billion in 2000 to $6.3 billion in 2003. It was bought out last year and taken private by an ownership group consisting of Kohlberg Kravis Roberts & Co., Bain Capital and Vornado Realty Trust.
“You’ve got mass merchants who are expanding their toy space and using it to drive total store volume,” said Michael Appel, managing director at Quest Turnaround Advisors. “These discounters are not worried about the margins they make on toys. How can you compete against that?”
Moderator’s Comment: What internal and external challenges does Gerald Storch face as he takes over the leadership reigns at Toys R Us? What will he
need to do if the company is to achieve a turnaround? –
George Anderson – Moderator
- New Toys
‘R’ Us CEO Faces A Slew Of Challenges – Dow Jones/iWon.com
- Ex-Target vice chairman Storch to fill top spot for Toys R Us –
The Associated Press/Fort Wayne Journal Gazette