Nation & World

Target could see boost from Toys 'R' Us demise

Chain might gain $600 million in sales: analyst

Target sales could see big gains from the demise of Toys ‘R’ Us. (Dreamstime)
Target sales could see big gains from the demise of Toys ‘R’ Us. (Dreamstime)

MINNEAPOLIS — Target could rake in more than $600 million in additional sales — which would translate into a nearly one percent lift in its comparable sales this year — as a result of the impending demise of Toys “R” Us, according to a new research report.

As the bankrupt chain prepares to shutter its 735 Toys “R” Us and Babies “R” Us stores in coming weeks, a number of other retailers should pick up some of that business.

Those expected to see higher toy and baby goods sales include Walmart, Amazon and Target, already among the biggest U.S. toy sellers, as well as smaller specialty retailers.

“Given (Target’s) mix and store overlap, we see it benefiting disproportionately,” Seth Sigman, an analyst with Credit Suisse, wrote in the report.

After analyzing both chains’ physical locations, Sigman concluded that 90 percent of Toys “R” Us stores and 96 percent of Babies “R” Us stores are within five miles of a Target.

Because of proximity and other calculations, he said Target is poised to capture about 15 percent of sales from those nearby Toys “R” Us locations, 5 percent of sales from the Babies “R” Us stores and 5 percent of the chain’s online sales.

If those numbers pan out, it would be a significant growth driver for Target, which had a 1.3 percent comparable sales increase last year. Earlier this month, executives forecast low-single-digit growth in that metric for this coming year.

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“There’s a tremendous amount of disruption occurring across the retail landscape,” Joshua Thomas, a Target spokesman, said in a statement.

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