This week should belong to Toys "R" Us (NYSE:TOY). Your shipping costs would be pretty high if you turned to online retailers such as Amazon (NASDAQ:AMZN) to get your gifts in time for Christmas later this week, and let's not even get started on counting on an eBay (NASDAQ:EBAY) auctioneer to come through on time.
While late November and the first few weeks of December belong to the online merchants, we are now in the final shopping days of the holiday season, and that means that the bricks-and-mortar chains have the home-field advantage.
So while one could say that most traditional retailers have a lot to live up to this week, the burden weighs even heavier on Toys "R" Us. Now that its parent company is looking to focus on its Babies "R" Us chain for infants and toddlers -- an area in which it can truly differentiate its services and offerings from pesky discount department stores such as Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) that have taken big bites in toys -- how much the company is able to get for its flagship toy business should depend greatly on how well it performs this quarter.
Don't kid yourself. Folks buying the stock these days are more than happy to see a sale go through. Despite Toys "R" Us posting a dip in same-store sales in 2004, the stock has risen by more than 60% over the past year. Investors saw how Kmart's (NASDAQ:KMRT) failure led to rich asset sale gains, so if Geoffrey -- the chain's giraffe mascot -- has to stick his head out, don't be surprised at the morbid shareholders calling for a guillotine.
How the eventual owner of Toys "R" Us plans to turn the retailer around, if a deal is actually brokered, remains to be seen. The company lost its lead as the country's leading toy seller to Wal-Mart a few years ago, and innovative makeovers and exclusive toy merchandise have failed to bring back the shoppers.
The potential is there. This week, at least, the crowds will be there. For a parent company that would rather be selling teething rings than biting its nails, it better be a good week. How far away the namesake chain appears from a turnaround may not only dictate the company's ultimate asking price, but whether or not it's a concept worth holding on to in the first place.
All done with your holiday shopping? What are the perfect gifts for a young child? What are the best learning and development toys? All this and more -- in the Parents and Expecting Parents discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz finds himself at a Toys "R" Us store almost monthly. However, he does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
