Tag Archives: Toys R Us

Smyth Toys Buys European Divisions of Toys ‘R’ Us

 

Toys R Us Quioccasin Rd Richmond, VA. Photo courtesy of Wikipedia.

Smyth Toys, a company based in Galway, Ireland, has agreed to purchase some of the European divisions of Toys ‘R’ Us. This is Smyth’s first time selling on the mainland of Europe. When the deal is implemented Smyth will run 93 brick and mortar shops and four online stores in Germany, Austria and Switzerland.

The buyer was found by Lazard, an investment bank, which was employed to look for buyers for Toys ‘R’ Us international subsidiaries after the giant US retailer filed for bankruptcy in March.

Smyths was founded in County Mayo and is owned by four brothers from Galway; Tommie, Tony, Liam and Padraig Smyth. The brothers own 21 stores in the Republic of Ireland and an additional 90 or so in Britain and Northern Ireland. The company has been growing quickly since 2007 when it entered the UK market, and is planning on opening more shops in Luton and Dundee in the near future.

Toys ‘R’ Us announced in January that it was going to close about 20% of its US stores as part of its strategy to come out of one of the largest in history bankruptcies by a specialty retailer. The plan did not work out and the Toys ‘R’ Us subsidiary in Britain was forced to close all 100 shops after not finding a buyer.

A bid was made on the Canadian division of the toy retailer by Fairfax Financial Holdings for $300 million.

US Companies Training Foreigners to Replace Homegrown Workers

Toys “R” Us at Vaughan Mills. Photo by Raysonho @ Open Grid Scheduler / Grid Engine

According to an investigation conducted by the New York Times, some US companies are training foreign workers in the US using temporary visas and then sending them offshore to work.

Companies like Toys ‘R’ Us and New York Life Insurance bring foreign employees into the US to train them to do the jobs which are done in their home offices in the US. After the worker has learned the job of the American employee, the US worker is then fired. The foreign worker goes home and begins his new job there.

The NY Times reports one example of a former employee of Toys ‘R’ Us who stated that a woman from India on a temporary visa sat with her for a month this past spring while she performed her job as an accountant at the toy company’s headquarters in Wayne, New Jersey.

“The woman…studied and recorded the accountant’s every keystroke, taking screen shots of her computer and detailed notes on how she issued payments for toys sold in the company’s megastores,” according to Julia Preston, the New York Times’ National Immigration Correspondent.

Many of the foreign workers were in the US on a special visa program known as H-1B. This program lets American companies hire foreigners if they are professionals with “highly specialized knowledge” which the company needs. However, the federal guidelines for the program say that the employers must sign a statement that declares that the hiring of the foreign workers “will not adversely affect the working conditions” of Americans or lower their wages.”

The fired workers stated that the foreign workers did not have specialized skills, and their employers forced them to train the foreigners, threatening to force them to resign if they refused.

“At the very least, those are violations of the spirit of the law,” Christine Brigagliano, a lawyer who advises companies on obtaining visas..  “Those contractors are signing on the bottom line, saying we will not undercut the wages and working conditions of Americans. But, in fact, they are.”

Toys R Us To Place New CEO, David Brandon

Toys R Us chairman and CEO Antonio Urcelay is scheduled to retire on July 1. Taking his place will be David Brandon, past CEO and chairman of Domino’s Pizza. The 63-year old executive was on hand to help Domino’s with its IPO. Brandon was also president and CE of Valassis Communications and also helped them transition to a publicly held company.
Until last October Brandon was the athletic director at the University of Michigan, when he resigned amid concerns about the poor showing of the school’s football team as well as other problematic issues in the athletic department there.

Urcelay, who is the same age as Brandon, was the CEO and chairman of Toys R Us since near the end of 2013. He was employed by the giant toy retailer since 1996.

Toys R Us, a Wayne, New Jersey-based company, was bought by Kohlberg Kravis Roberts & Co, Bain Capital Inc, and Vornado Realty Trust in 2005, taking the company private. The huge toy store, which also has Babies R Us shops, has 866 outlets in the US, Puerto Rico, and Guam. They also have 730 stores globally, and an additional 240lnsed tor i37 countries and jurisdictions. They also operate FAO Schwarz.

Toys “R” Us Struggling to Play the Competition Game

Toys R Us  Posted Net Losses in 2013
Toys R Us Posted Net Losses in 2013

As the economy struggled in its continuing bid at recovery, Toys “R” Us took a lot of the brunt as sales plummeted in 2013. The giant toy store chain reported a net loss of $210 million during the fourth quarter of 2013 and a total loss of $1 billion for the year. The losses were blamed on fierce competition from on-line sellers such as Amazon, and discount department stores like Wal-Mart.

Earnings for 2012 totaled $239 million, accentuating the challenges of last year’s marketplace.

The private held retailer posted a decrease in same-store sales of 4.1 percent in the US and 2.2 percent internationally during the fourth quarter of 2013. Those figures are an important indicator of a retailer’s overall health, and they included the crucial holiday season.

“It was a challenging year, with declines in both our domestic and international segments,” CEO Antonio Urcelay said in a statement to investors.

“The U.S. business experienced the more significant downturn, primarily due to a decrease in net sales, margin pressure and one-time items, including the write-down of excess and obsolete inventory as we take the necessary and prudent steps to improve the business.”

Toys “R” Us did have a good year in China, however. As the Chinese economy continues to expand and more people are climbing the affluence ladder, there is more disposable income available to spend on children’s playthings.

So far this year things are looking up a bit for Toys “R” Us here at home. So far there has been a 3.5 percent increase in same-store sales in the US due to an increase in entertainment related toys connected to beloved movie franchises. Net sales for all of 2013 totaled $12.5 billion. That is $1 billion less, or 7.4 percent, from 2012.

Black Friday Bargains and Extended Hours Boost Sales for Retailers

The day after Thanksgiving is known to retailers and consumers as Black Friday. On this day smart shoppers take to the malls in droves, gearing up for the Christmas giving season with slashed prices only available on this special day.

Consumers can expect highly reduced prices on everything from toys, clothing, electronics, and much more.

According to BlackFriday2011.com, a type of WikiLeaks for serious Black Friday shoppers who want to see advertisements before they get published, there is expected to be 220 million people bargain hunting this coming Friday, up from 212 million last year.

Black Friday is incredibly important to retailers. SpendingPulse, a market analysis outlet, estimates that Black Friday business is worth as much as $20 billion in sales, with many of the largest shopping outlets opening earlier with extended hours.

Toys R Us is planning on opening at 10pm on Thursday night, just enough time to barely digest the Thanksgiving Turkey. Sears will be open on Thursday morning, interfering with consumers’ ability to watch the annual Macy’s Thanksgiving Day Parade; and Walmarts is not taking any closing time at all.

“They’re all trying to take market share away from each other,” Cynthia Groves, head of global retail consulting at Newmarket Knight Frank in Washington.

The longer hours for the shops has many people complaining, and is not seen universally as a good thing:

“It’s a national holiday, not a national shopping day,” wrote one signer or a petition to not open Target at midnight on Friday morning. “Encouraging people to shop in the middle of the night is bizarre,” added another petitioner.