Toys “R” Us Asia Ltd, which currently operates 223 stores in China and the Southeast Asian markets, has entered into an agreement with Fung Retailing Limited to consolidate Toys “R” US Japan, which operates 160 stores in the country, into Toys “R” Us Asia.
The unified business will now be owned by about 85 per cent by Toys “R” Us, with the remaining percentage held by Fung Retailing.
The combined company’s headquarters will be located in Hong Kong, while a regional office will continue to operate in Kawasaki, Japan.
The Toys “R” Us Southeast Asia markets includes stores in Brunei, China, Hong Kong, Malaysia, Singapore, Taiwan and Thailand. Toys “R” Us Asia also licenses an additional 34 retail locations in the Philippines and Macau.
“This expansion marks another milestone for Toys”R”Us as a global company,” said Dave Brandon, chairman and CEO of Toys”R”Us, Inc. “The businesses are highly complementary with regards to markets, products and technology, and we believe that the strategic decision to consolidate them will allow us to streamline operations and accelerate innovation to continue to deliver a world-class experience for our customers in Asia.”
Andre Javes, president of Toys “R” Us Asia Pacific, said they have seen growth in expenditure on children’s products in recent years, driven primarily by Asia’s economic growth, rising middle class and rapid urbanization.
“Japan continues to be a huge market for toys and baby products, coupled with the fact that the number of children in China is expected to increase, there exists significant opportunities for us to grow these businesses,” said Javes. “The combination of these businesses is not only great news for our customers, it will also allow our team members to work more closely with their counterparts across geographies, sharing best practices and identifying efficiencies in operations.”
Javes will continue to oversee all operations of the combined businesses, as well as Toys”R”Us Australia.
Toys”R”Us was first introduced in Asia by Fung Retailing in 1985 under a licensing agreement with Toys”R”Us, Inc in the United States. Over 250 stores have been opened since then. After the merger with Toys”R”Us Japan, Fung Retailing will own approximately 15 per cent of the enlarged joint venture.
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