Toys 'R' Us liquidation threatens to curb toymakers' innovation

New York

TOYS "R" Us Inc doesn't sell the most toys in the US - that distinction goes to Walmart Inc - but it has remained a key proving ground for kids' gadgets, games and other playthings.

And that may be the biggest blow to the toy industry if the retailer moves ahead with a liquidation of its US operations, a prospect that became more likely the past week. Toys "R" Us is still the place where up-and-coming products get discovered. The retailer devotes so much of its space to toys - rather than the few aisles at Walmart and Target Corp - that it can take chances on new items and smaller suppliers.