* Storch joined Toys R Us in 2006
* IPO this year seen unlikely-sources
* Toys R Us sales fell in 2012 holiday season
By Dhanya Skariachan
Feb 13 Toys R Us Inc said on Wednesday
that Gerald Storch will step down as its chief executive, just
weeks after the world's largest dedicated toy retailer reported
disappointing results for the all-important holiday season.
The news added to doubts about the retailer's chances to
return to being a public company this year, after filing for an
initial public offering in May 2010.
The company, which saw its U.S. sales fall during the
holiday season, said it will start a search for a successor.
Storch, 56, will remain chairman of the board.
"There was a lot of pressure on him, there was a lot of
finger-pointing. 'How did he mess up 2011? Why wasn't 2012
better?'," a source familiar with the matter said.
Toys R Us first went public in April 1978 and operated as a
public company until July 2005, when it was taken private by KKR
& Co LP, Bain Capital and Vornado Realty Trust
in a $6.6 billion deal.
While the company's results were far better when it was
originally considering an IPO, some of the owners thought they
would be able to raise more if they waited, the source familiar
with the matter said.
But the results have lagged expectations since then.
"Everything subsequent to the decision not to go (public) at
that time, you could probably say was the result of operation,"
the source said.
The New Jersey-based retailer's chances of going public this
year are very small, two sources told Reuters this week.
"What will require (for a Toys R Us IPO in the future) is
the owners to take a more conservative view of what the value of
the company is," one of those sources said.
Toys R Us spokeswoman Kathleen Waugh declined comment on the
IPO and did not give any more information on the CEO search. She
said Storch was not available for an interview on Wednesday.
A former Target executive, Storch joined Toys R Us
in 2006. While Storch has been credited for boosting the toy
retailer's e-commerce business, the company operates in a tough
industry where it competes against Wal-Mart Stores and
DEPARTURE FOLLOWS TOUGH YEAR
In 2012, toy sales fell 3.5 percent to $20.47 billion in the
United States, the world's largest toy market, according to
research firm NPD Group.
Toys R Us previously said that its same-store sales in the
United States fell 4.5 percent in the nine weeks from Oct. 28 to
Dec. 29, a key time for sales of toys. Its total sales fell 4.7
percent during that period.
Toys R Us has not yet reported results for its latest fiscal
year. In the year that ended in January 2012, same-store sales
fell both at home and in the international business, while total
sales rose $45 million to $13.9 billion.
During Storch's tenure, Toys R Us took over running its
Toysrus.com web site, after the site was run by Amazon. It also
bought other web sites, such as Toys.com, as well as the KB Toys
brand and the FAO Schwarz chain.
Toys R Us operates stores under its namesake brand and the
Babies R Us and FAO Schwarz names.