New Jersey-based retailer Toys ‘R’ Us reported a third-quarter net loss of US$105 million versus US$93 million for the same period a year ago citing economic weakness in Europe and Japan and an increase in interest expenses as factors contributing to the decline.

The company’s earlier layaway program had a partial role to play in comparable store sales decreasing 4.1% domestically while net sales internationally dropped 4.6%.

In what’s becoming a familiar trend, net sales in the learning toy category went up, growing 1.3%, while the entertainment category (which includes video game software and hardware) continues to struggle, dropping 7% for the quarter.

CEO Jerry Storch said in a statement that he expects the company will rebound for the important holiday season now that is has launched its new free layaway, price match guarantee, hot toy reservation and ship from store programs.

It also hopes to leverage its new business opportunities in China and Southeast Asia, as well as increased sales from mobile and online shopping.