With parent company Toys R Us committed to splitting up the family, Babies R Us has launched a search for a brand consultant to help shape an identity before it becomes indepedently owned.
The retailer, based in Wayne, N.J., last week held chemistry meetings with an undisclosed number of agencies regarding a branding assignment that sources said would include research and some creative work. Though creative is currently handled in-house, the assignment could open the door to media planning and buying chores, sources said. Babies R Us, which operates 215 stores nationally, spent about $5 million on media last year, according to Nielsen Monitor-Plus.
Toys R Us announced in August that it plans to seperate ownership of its growing baby-store brand from its eroding toy operation, which has come under assault in recent years from big-box discounters, primarily Wal-Mart. WPP Group's Young & Rubicam, New York, handles the $120 million Toys R Us account.
The Babies business—which has grown from a pretax profit of $110 million in 2000 to an estimated $230 million last year—has triumphed in part because it is less vulnerable to retail chains offering a wide assortment of goods at steep price cuts, said Donald Trott, an analyst with Jefferies & Co. in New York. Baby clothing and supplies is not a seasonal business, and new parents typically focus on finding high-quality products that are safe and sturdy, rather than those with the cheapest price tags, Trott said. "They're viewing it in terms of 'I want to go to the specialists,' " he said.
Since 2000, pretax profit for the company's toy business has eroded from $407 million to a predicted $60 million last year, Trott said.