Lots of investors are likely watching to see how the holiday season has gone for Toys "R" Us (NYSE:TOY). Earlier on, there were rumblings that it might be a much better season for the retailer than last year, but in the meantime, there is another sign that the company is continuing to put its Babies "R" Us chain in a position of promise.
According to its press announcement, Toys "R" Us will convert one of its Manhattan stores to a Babies "R" Us outlet, and the new store will be up and running by the 2005 holiday season. We've all already gleaned that Babies "R" Us is currently the crown jewel for Toys "R" Us, seeing how it has little competition for the burgeoning baby shower gift registry market.
After all, the Wal-Marts (NYSE:WMT) and Targets (NYSE:TGT) of the world can easily discount toys, but Babies "R" Us's vast selection of infant gear and the ubiquity of its baby shower registry have given it a real edge. An edge its own parent company just doesn't have in the crowded toy arena.
It's hard to complain about the logic of the move -- the new Babies "R" Us will be in an extremely high-traffic area, and it's a retail concept that is really resonating with people. In its announcement, Toys "R" Us pointed out that 100,000 babies are born in New York City every year. That's means a heck of a lot of baby showers.
It also drives the point home that Babies "R" Us has become the growth vehicle for Toys "R" Us. As longtime Fool contributor Rick Munarriz pointed out recently, investors have pumped up shares of Toys "R" Us over recent months, mostly under the auspices that the flagship toy business, if nothing else, has at least some added value as a real estate play as well as a retailer, like Kmart (NASDAQ:KMRT).
Regardless, with this latest strategic move, Toys "R" Us is showing that sometimes it takes baby steps to win the game -- quite literally.
Do you love to beat your friends at Monopoly or Trivial Pursuit? Do you scour the shelves of Toys "R" Us for new games to play? Talk to other Fools on our Cards & Board Games discussion board.
Alyce Lomax does not own shares of any of the companies mentioned.
