ASIAN TOYS “R” US AND THE HOLIDAYS

It’s the first Christmas in the U.S. without Toys”R” Us stores operating during the holiday season  The hedge funds who owned the company, liquidated the Toys “R” Us stores in the U.S. for the profits that ensued.

But it was a little more cumbersome to divest themselves of the hundreds of stores in Asia, thus they searched for a buyer and found one earlier this month in Hong Kong-based Fung Retailing, Ltd.  The new owners are gearing up for the holidays and plan to expand the business next year by opening dozens more stores from China to Japan.  The new owners are of the opinion that the traditional Toys “R” Us stores stacked with thousands of choices are “paralyzing” for customers, thus they plan on maintaining smaller stores – 10,000 square feet vs the larger 40.000 size stores – and focus on attracting buyers who are looking for high-quality educational toys.  The Asian operation has more than 450 stores in 10 markets, including 168 in Japan and 166 in China and plans to open 68 new stores in 2019, with 50 additional in mainland China.  The Chinese market is particularly lucrative and spending on children’s products is forecast to rise to $189 billion in 2022.  The brick and mortar stores fight the same battles against online retailing in Asia, as they do in the U.S.  However, they are assisted in Asia, and particularly China, by the risk factors that concern online purchases, whereby purchases made online are likely to  be counterfeits rather than the actual products ordered.  So, Toys “R” Us are going like gangbusters in Asia, for a variety of reasons, including:  better management than that of the U.S. stores under the ownership of the hedge funds and better competition-leveling circumstances.  Thus, if you are interested in shopping at a Toys “R” Us for this Christmas, try visiting Hong Kong or Japan.

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