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Toys 'R' Us Video Fallout Uncertain

11 Jan, 2006 By: Erik Gruenwedel

The decision by Toys “R” Us Inc. to shutter 87 stores in the United States by the spring, resulting in 3,000 layoffs, looks to have an undetermined impact on select home entertainment studios.

Twelve of the stores will be converted into Babies “R” Us stores.

Paramus, N.J.-based Toys “R” Us, which still owns, operates or leases 587 stores and 230 Babies “R” Us locations in the U.S., will record $155 million in costs related to the closing and conversion of stores, according to a filing with the Securities Exchange Commission. The chain lost $126 million in the third quarter.

Mini-major Lionsgate declined comment on the closings, and other content providers, such as HIT Entertainment, Anchor Bay Entertainment and Buena Vista Home Entertainment, were unavailable for comment.

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