As the economy struggled in its continuing bid at recovery, Toys “R” Us took a lot of the brunt as sales plummeted in 2013. The giant toy store chain reported a net loss of $210 million during the fourth quarter of 2013 and a total loss of $1 billion for the year. The losses were blamed on fierce competition from on-line sellers such as Amazon, and discount department stores like Wal-Mart.
Earnings for 2012 totaled $239 million, accentuating the challenges of last year’s marketplace.
The private held retailer posted a decrease in same-store sales of 4.1 percent in the US and 2.2 percent internationally during the fourth quarter of 2013. Those figures are an important indicator of a retailer’s overall health, and they included the crucial holiday season.
“It was a challenging year, with declines in both our domestic and international segments,” CEO Antonio Urcelay said in a statement to investors.
“The U.S. business experienced the more significant downturn, primarily due to a decrease in net sales, margin pressure and one-time items, including the write-down of excess and obsolete inventory as we take the necessary and prudent steps to improve the business.”
Toys “R” Us did have a good year in China, however. As the Chinese economy continues to expand and more people are climbing the affluence ladder, there is more disposable income available to spend on children’s playthings.
So far this year things are looking up a bit for Toys “R” Us here at home. So far there has been a 3.5 percent increase in same-store sales in the US due to an increase in entertainment related toys connected to beloved movie franchises. Net sales for all of 2013 totaled $12.5 billion. That is $1 billion less, or 7.4 percent, from 2012.
And that’s what has been happening. Finally. It sure has taken a long time. But figures now show an increase of 8.5 percent year-over-year for the first six months of 2011. According to a report in AdAge, this puts the industry “on track to become the first full year of positive music sales since 2004.”
Dramatic Digital Sales
According to Nielsen SoundScan, it seems like it is the digital sales that are the force behind this escalation. Digital album sales increased almost 20 percent and digital track sales, 11 percent. But Nielsen Entertainment’s Senior VP-Analytics was somewhat surprised by this. David Bakula told Ad Age that “sales figures were starting to plateau heading into fourth-quarter 2010.”
So what is the reason for this increase? There have been many events that have stimulated this: for the first time, the Beatles catalog is now available for digital download; Limewire (an illegal downloading site) was shuttered; and stores such as Circuit City and some Borders locations have closed down. It seems that these events have “given digital music sales more momentum.” As well, in general, the public is feeling more comfortable with digital too.
Album Sale Increase
There have been substantial gains with actual album sales too: from every three albums purchased, two are CDs. Looking at all sales (actual and digital) there has been an increase of 3.6 percent in the first half of 2011.
Some Bad News
But while this is of course great news, there is unfortunately still some problems within the music industry. There is still a way to go on the recovery chart. The music industry has been enduring losses for the last seven years – with an especially tough year last year when sales dropped 2.4 percent.
However, now that there has been this substantial increase, Bakula believes “the upward trend in digital single sales…coupled with a promising fourth-quarter release slate and aggressive music-catalog promotions from shows like ‘Glee’ should even things out.”