Toys '

Toys 'R' Us chief out

NEW YORK (CNNfn) - In a surprise move, Toys "R" Us Inc. chief executive
officer Robert C. Nakasone resigned due to "differing views regarding the
direction of the company," the retail giant said Thursday.

The Paramus, N.J.-based toy seller said Michael Goldstein, chairman of the
board and former CEO, had already stepped into the role of acting CEO.
Goldstein joined the company in 1983 and was named CEO in 1994, a position
he held until 1998 when he was named chairman.

Toys "R" Us has been suffering setbacks recently and lost its No. 1 U.S. toy
seller spot last year to Wal-Mart Stores Inc. (WMT). The company reported
flat second quarter earnings last week.

The retailer has been ramping up its Internet strategy, but discontinued its
four-month old relationship with Benchmark Capital, a California venture capital
firm experienced in online ventures.

"The company has a lot of problems," said Margaret A. Gilliam, president of
Gilliam & CO. "Bob Nakasone has initiated a lot of change. He's trying to
change the culture of the company and that's very difficult to do."

Nakasone, 51, who became CEO in 1998, has been with the company since
1985 and had served as president and chief operating officer.

Under Nakasone's leadership, the company began a major overall of all its
stores called the C3 program. The program features clusters instead of aisles
and is intended to do away with the supermarket look of the stores. The
company expects to have 170 stores converted by the upcoming holiday season
and 85 percent of its 705 U.S. stores done by next year.

"He's been the leader of the development of C3," said Robert Schweich, an
analyst at Schroeder & Co. "There's a lot of change going on. One could
conclude by the timing that the board decided it wanted a new CEO in place for
next year."

Schweich said that neither Nakasone nor Goldstein have a merchandising
background -- something the company's board apparently desires for its CEO.

back

Boycott Toys-R-Us