Toys ‘R’ Us may have staying power in Bay State

Toys “R” Us Inc.’s improved financial prospects should bode well for its dozens of local stores operating on a seasonal basis.

Less than a week after reports that the toy retailer’s private equity owners are mulling an $800 million IPO, Toys “R” Us said its 1,600 stores generated $6 billion in revenue and a net profit of $330 million in the fourth quarter. While both figures were relatively flat from the year-earlier span ($5.9 billion in revenue, $387 million profit in 2009), the quarter’s performance did cap the company’s second consecutive year of revenue growth and profitability after a dismal run that saw it shutter hundreds of stores nationally.

Jerry Storch, the company’s chairman and CEO, said heavy investments in store formats – the company is pursuing a duel toy and so-called juvenile-product offering – appear to be paying off in the form of positive customer-satisfaction surveys and wider gross margins (up 0.2 percent). The company invested $325 million in new stores and renovations last year, versus $192 million the year before.

As previously reported by The Round Up last year, the company opened 21 so-called pop-up stores in Massachusetts after significantly reorganizing its real estate holdings in the United States. The company, which boasted 24 total stores in the commonwealth and Southern New Hampshire as of this week, has repeatedly said it will monitor those operations to determine whether a longer-term operating strategy at those locations is warranted.

In 2004, Toys “R” Us was acquired and taken private in a $6 billion deal involving private equity giants Kohlberg Kravis Roberts of New York, Boston’s Bain Capital and Vornado Realty Trust of New York.