| NEW YORK
NEW YORK If you can preorder an iPhone 5, why not put a Furby or other hot toy on hold, too?
Toys R Us Inc TOY.UL plans to let holiday shoppers reserve what it considers "hot toys," as it tries to differentiate itself from its rivals as it heads into what is traditionally the largest selling season of the year.
The world's largest specialty toy retailer is also looking to open more pop-up stores and offer more exclusive lines of playthings this year to win shoppers from rivals Wal-Mart Stores Inc (WMT.N) and Amazon.com (AMZN.O).
The stakes are high for Toys R Us as it has yet to return to being a public company after filing for an initial public offering in May 2010.
Traditionally, retailers earn more than a third of their annual sales in the holiday season running from the day after U.S. Thanksgiving through Christmas.
The retailer, owned by KKR & Co LP (KKR.N), Bain Capital LLC and Vornado Realty Trust (VNO.N), is also offering a free layaway plan for all orders placed by October 31.
The "Hot Toy Reservation" service lets shoppers reserve any of the 50 items on a yet-to-be announced list by making a 20 percent down-payment in person at its stores through October 31. Shoppers will be notified by e-mail when their orders are ready and have until December 16 to pick up the reserved items.
Furby, the furry toy from the 1990s made by Hasbro (HAS.O), is getting a facelift and Toys R Us Chief Executive Jerry Storch expected it to become a best seller.
He also predicts the retailer's own tablet for children, Tabeo, will be on the list of hot toys.
Storch hopes the next version of the Wii U console by video game maker Nintendo 7974.OS and various new videogame titles will boost his company's business as well.
The videogame business was down 20 percent at Toys R Us in the second quarter, while the larger industry is down 25 percent Storch, citing NPD data, said.
The retailer is also carrying more exclusive lines from Lego, Jakks Pacific (JAKK.O), Mattel's Fisher-Price (MAT.O) and Playmobil this year.
The store's private label toys have seen their sales grow 30 percent between 2006 and 2011, Storch said. They account for between 10 percent and 20 percent of the retailer's overall sales. He sees room to double or triple that over a longer term.
Toys R Us plans to open about 200 temporary stores in the United States this year. It opened about 150 such stores last holiday season.
The retailer, which saw its e-commerce sales rise 29 percent in 2011 from the prior year, is also stepping up its efforts to woo online and on-the-go shoppers.
It will roll out a "ship to store" program to allow customers to send some online purchases to their local Toys R Us or Babies R Us store free of charge. It is also setting up merchandise pick-up kiosks in stores to reduce wait times for shoppers who are coming to pick up pre-ordered items.
(Reporting by Dhanya Skariachan; Editing by Leslie Gevirtz)