Irish Toy Retailer Smyths will acquire the Toys R Us Stores in Germany, Austria and Switzerland. This deal includes 93 TRU stores and 4 online shops. There are also some new developments for TRU in the USA, Canada, Asia and Australia! Click through for more details!
Update: Smyths will rebrand the TRU stores. Details added to the article!
Smyths Toys already has 83 stores in Britain, 7 in Northern Ireland and 21 in the Republic of Ireland. The deal has yet to be approved by the US court and relevant authorities but when it goes through Smyths has stated that they will take on the existing TRU employees, staff and management. So no one will be laid off.
Smyths Toys will rebrand the Toys R Us Stores, so it seems the name “Toys R Us” will disappear.
Tony Smyth said this about the acquisition: “We started the business more than thirty years ago and are very grateful to our customers, our employees and our suppliers for the support we have received in that time. We are convinced about the future of multi-channel specialist toy retail and are confident that we can successfully introduce and grow our brand in Continental Europe. The Toys R Us business is profitable, has a strong leadership team and already has many loyal customers. It provides a great starting point for our expansion.”
Detlef Mutterer, the managing director for Toys R Us Central Europe, commented: “After an extensive sales process, my colleagues and I are pleased that Smyths Toys has won the bidding process for our business. Smyths Toys is a proven leader in the retail industry. It has achieved strong growth in recent years and will complement our business in an ideal way. We look forward to working with our new colleagues, responding to customers and growing the business further. We already have many suppliers in common and we see this as good news for the supplier community and our other business partners.”
It seems the future of Toys R Us in the mostly German speaking part of Europe is secure for now. EBITDA for TRU in these three countries was 22 million euros in 2017. Germany, Austria and Switzerland combined have a population of approx. 100,000,000 people. Smyths paid approx. 79 million euros on a cash-free and debt-free basis for the 90+ stores.
TRU also has a significant presence in France and Spain, and they are also found with a lower number of stores in Sweden, Portugal, Poland, Norway, Finland, Iceland plus a few other European countries. The fate of these Toys R Us stores is still unclear.
There are plans to merge the 45 Australian Toys R Us stores with the Asian Toys R Us business and any deal made with an Asian partner will therefore most likely also include the TRU stores in Down Under. But a separate deal for each of the businesses is also still possible. Either way, it seems Toys R Us in Asia and Australia will stay in business with new owners. A bid has been made already.
The bid by MGA Entertainment’s Isaac Larian for up to 200 Toys R Us Stores in the USA was rejected because it did not qualify under auction rules, another two bids for the Canadian branch were also turned away. At the moment Fairfax Financial Holdings is the “stalking horse”, they are bidding $300 million for the Canadian Toys R Us stores, but they could still be outbid at the auction. The auction is held on Monday (that is, today). We will post an update or a new article as soon as we know more.
At the end of the day it could very well be that in most countries Toys R Us will continue under new ownership. This would be good news for collectors, since Toys R Us is still a significant toy retailer in Europe, Australia and Asia and an important source for Star Wars toys.
Does any of our UK readers care to share their experiences with Smyths in the UK? Do you think they have what it takes to run the Toys R Us stores in Germany, Austria and Switzerland?
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