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Business

Why American Girl is breaking tradition with Toys R Us deal

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Business

Why American Girl is breaking tradition with Toys R Us deal

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COMING UP:Why American Girl is breaking tradition with Toys R Us deal

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Transcript

00:00:01
>> American Girl has found a real life pied-à-terre. I'm Con Riggins in New York standing in one of roughly two dozen American Girl locations worldwide. Now, what used to happen is that in order to get the higher-end realistic dolls, you had to come to a store like this or go to the company's website.
00:00:19
But that is about to change. American Girl announcing on Wednesday that for the first time ever, it is going to open a store within a store for the dolls. The location, Toys R Us. That might be just what American Girl, and it's parent company Mattel, needs to reinvigorate sales for the quarter.
00:00:37
Just reported in July, sales were down 20% compared to the same time the year before. The exclusive tie-up will put mini American Girl outlets inside roughly 100 Toys R Us locations by the end of October with more to follow next year. American Girl hopes the timing will be perfect with the launch of a new lower priced Wellie Wisher line of dolls and just ahead of the crucial holiday shopping season.
00:01:01
But the shop in shop business motto has a questionable track record, especially for brands that are supposed to be somewhat exclusive or higher- end. Both Ralph Lauren and Michael Kors recently announced they are pulling back from the store within a store, saying the expansion had the opposite intended effect by cheapening the brand, which ultimately hurt sales.