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Child World Accuses Toys ‘R’ Us of Cheating

September 19, 1991

BOSTON (AP) _ Child World Inc. says a promotional campaign designed to attract customers also attracted some unscrupulous behavior by rival toy store Toys ‘R’ Us.

Child World on Wednesday accused its competitor of slinking employees into Child World stores, buying promotional bargains and reselling some of the items in Toys ‘R’ Us stores.

Toys ‘R’ Us Inc. dismissed the accusations as a media ploy and claimed Child World has been guilty of the same behavior.

″This is an entire national scheme,″ said W. John Devine, chief executive officer of Child World. Devine, who left Toys ‘R’ Us in 1983 after 17 years, said company attorneys were determining whether Child World had any legal options.

Angela Bourdon, a spokeswoman for Toys ‘R’ Us, said the charge was ″purely a publicity stunt on their account.″ She denied that any employees were purchasing goods from Child World.

Child World is the nation’s No. 2 toy retailer, behind Toys ‘R’ Us.

Without going into details, Bourdon said, ″We know they’ve done it with us.″

She said Toys ‘R’ Us would wait to see what, if any, legal action Child World takes before commenting further.

Child World claims that Toys ‘R’ Us improperly took advantage of its ″Pandamoneyum″ promotion, intended to attract customers lost during a financial restructuring late last year.

Child World, with 153 stores, lost $192.5 million in 1990, mostly due to restructuring costs, Miller said.

Under the promotion, customers receive coupons good for $5 off on purchases of $25, and $25 off for purchases of $100. The certificates are redeemable in October.

Rules posted in Child World stores explain that retailers are ineligible for the promotion, said Greg Miller, a Child World spokesman.

Child World said some Toys ‘R’ Us employees and managers have been buying diapers, baby food and formula, sold at close to cost. They not only are getting the redeemable coupons, Child World said, but are ″reselling the Child World goods as Toys ‘R’ Us inventory.″

″We’re talking here a million dollars or more of stuff that they are buying,″ said Devine. ″So they’ll retrieve 25 percent or $250,000″ next month.

When confronted, Devine said ″Some of them say I work for Toys ‘R’ Us, I guess you got me.″

″Some of them say they are not employed, when they are confronted,″ he added. ″Then some of our managers will just cruise by Toys ‘R’ Us stores and find that the same people work for the company.″

Toys ‘R’ Us, with 458 stores, had $5.5 billion in sales last year, Bourdon said.

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