The investment of significant capital to renovate these stores... would not be prudent

John Eyler

The firm will close 64 of its stores and shed 1,900 workers.

The company said the move, which also includes the consolidation of store support facilities and the reshaping of administrative and financial services, was part of its wider restructuring programme

The toy empire, operating more than 1,600 stores all over the world, like many other retailers has suffered poor earnings performance since the third quarter of 2000.

The losses for the first nine months of the past year totaled $91m (�65m).

Toy story

Toys R Us, once the biggest toy retailer in the US, lost the ground to the Wal-Mart, which attracted shoppers with lower prices for some popular items such as the Barbie doll.

The company has struggled to reposition its business in recent years, after investments in e-commerce failed to pay off, and its ageing retail outlets failed to attract an increasingly discriminating public.

The total cost of the renovation is estimated at half a billion dollars.

John Eyler, the company's chief executive, said that converting those stores listed for closure would not have made financial sense.

"In our judgment, the investment of significant capital to renovate these stores to the Mission Possible format would not be prudent," he said.

"Rather, we will concentrate our investments on those stores judged most likely to produce superior returns," Eyler added.