Best Buy and Toys R Us are both in post-holiday downsizing mode, as they lick their wounds from a tough holiday season.
Toys R Us, which reported holiday sales down 4.7% vs. last year (see "Tough Holiday Season for Toys R Us"), is laying off up to 200 headquarters employees with notices going out next week, according to the New York Post, reducing its Wayne, New Jersey staff by 10% or more.
Senior marketing and merchandising executives will be included, so that new president Hank Mullaney (formerly of Walmart) can bring in his own team, according to the Bergen Record. The company will announce around 100 store closings in the coming weeks, according to the report.
Best Buy is cutting up to 2,000 managers and supervisors, concentrating on management at regional offices, according to the New York Post. Like the Toys R Us cuts, the goal is to avoid cutting staff at stores, which can hurt customer service, and focus on management above the store level as the staff to cut.
Both chains, which grew as big box "category killers" transformed the retailing landscape, are now under pressure from even larger companies: Amazon, which pressures them on both selection and price, and Walmart, which is a relentless price competitor.
Toys R Us has carried the broad range of action figures favored by collectors, and Best Buy has been a large retailer of anime over the years, so both chains have footprints in geek culture. Neither is in danger of failing, but both are struggling to find a way to compete with the dual threats they face.
Posted by ICv2 on March 4, 2014 @ 1:34 am CT