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Toys 'R' Us to cut 3,000 jobs
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September 16, 1998: 3:19 p.m. ET
Toy retailer sets $495M restructuring charge in 3Q, will close 90 stores
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NEW YORK (CNNfn) - Toys 'R' Us, the world's largest toy retailer, said Wednesday it will close or sell 90 stores, cut about 3,000 jobs worldwide and take a $495 million charge in the third quarter in an effort to improve operations.
Stung by heightened competition from discount retailers and warehouse clubs, the Paramus, N.J.-based retailer said it will close or sell 50 international toy stores, nine in the United States, and 31 Kids R Us apparel stores.
The restructuring is expected to improve 1999 operating earnings by more than $75 million, the company said.
"These actions will be the springboard to implementing our expanded vision for the future, which is to provide not only toys -- but also to provide our customers with broader merchandise offerings and services for kids and families," Chief Executive Robert Nakasone said. "We can now move forward with our aggressive program to reposition and reformat our worldwide toy stores and accelerate the benefits to be derived from the initial stage of our supply chain management systems."
He added the restructuring also will allow management at stores in under-performing markets "to focus their time and energy on more promising opportunities."
Toys 'R' Us also said it will consolidate its distribution centers and administrative offices and reduce administrative support functions in the United States and Europe.
Toys 'R' Us last month posted a 60-percent drop in second-quarter profit.
Donald Trott, a retailing analyst at Brown Brothers Harriman, said, ``Basically, they are going in the right direction. They are acknowledging that the current store format is obsolete.''
Trott said that the new format will not solve all of its problems and it may need to be refined further.
The company currently operates 1,462 stores worldwide.
Shares of Toys 'R' Us (TOY) were off 11/16 to 18-3/16 on the New York Stock Exchange Wednesday. 
-- by staff and wires
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