Report: Toys ‘R’ Us preps for a turnaround with ‘Project Sunrise’ plan
Looking toward the future, Toys ‘R’ Us’ CEO has established a recovery plan.
In a meeting at Toys “R” Us’ pop-up store in Times Square, chief executive David Brandon outlined the company’s turnaround plan, internally called “Project Sunrise.” From a high-level, it includes integrating its online and in-store shopping experiences, adding faster shipping and better technology and customer service, according to Reuters.
The chain’s older suburban big-box shops will also be overhauled to give kids a chance to try out toys in the store. The chain will also open smaller stores in urban areas, including Washington, D.C., Boston and Detroit. The chain’s 64,000 workers could also see wage increases, Reuters said.
Toys ‘R’ Us filed for Chapter 11 bankruptcy protection late Monday night in federal court in Richmond, Va. The company is to working with its debt-holders and other creditors to restructure the $5 billion of long-term debt on its balance sheet.
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Home goods retailer’s sales tumble in Q2
A combination of restructuring costs, Hurricane Harvey and a new accounting standard took its toll of Bed Bath & Beyond’s second quarter results.
For the quarter ended Aug. 26, the home goods retailer reported net sales of about $2.9 billion, a decrease of about 1.7% from the same time last year. Comparable sales also decreased by approximately 2.6%, surpassing analysts’ expectations of a 0.7% decrease.
Same-store sales from physical stores declined in the mid-single-digit percentage range during the quarter. However, comparable sales from customer-facing digital channels continued to have strong growth, in excess of 20% for the 13th consecutive quarter.
The company reported net earnings of $94.2 million, a decline from about $290 million for the same period in 2016. Bed Bath & Beyond blamed the slip on cash restructuring charges associated with the acceleration of the realignment of its store management structure, as well as costs associated with the impact of Hurricane Harvey, and a new share-based payment accounting standard.
The company is undertaking a number of transformational initiatives focused on driving operational excellence, as well as opportunities for added efficiencies. These projects “should produce savings in excess of $150 million over the next few years, a portion of which may be strategically reinvested toward future growth,” according to the retailer.
Looking ahead, the company is modeling net earnings per diluted share for the full year to be about $3, with the balance of the net earnings per diluted share to be split approximately 20% in the fiscal third quarter and approximately 80% in the fiscal fourth quarter, the company said.
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