Toys “R” Us ANZ Ltd, the digital-first, direct-to-consumer (DTC) retailer behind the relaunch of Toys “R” Us (TRU) in Australia and New Zealand, is moving ahead with its plans to bring the brand back to the UK.
The company executed agreements for a $15 million senior term loan facility to support its entry into the UK and planned e-commerce launch this year. The debt funding deal is expected to close tomorrow. The loan will be used for the acquisition of inventory and to support operations and must be paid back within three years.
“In the finalization of the facility, we have remained focused on expediting our plans to move and consolidate our offices and warehouses [in Australia],” says Toys “R” Us ANZ CEO and Managing Director Dr. Louis Mittoni. “Transition from existing warehouses into the company’s new headquarters, warehouse, and e-commerce distribution facility in Clayton, Victoria commenced in early July and is scheduled for completion in September. This process is expected to cause near-term disruption to sales revenues; however, we expect this to be transitory and view the exercise as serving the company’s long-term interests. With the new facility four times the size of the current interim facility, we are building strong foundations for future growth and expansion.”
While the toy industry in the U.S. continues booming as it bucks the trend of inflation and supply chain issues, the international market has its own challenges, which Mittoni acknowledged in a statement earlier today.
“Against a backdrop of unpredictable declines in Australian consumer confidence with attendant impacts on local toy industry sales, we continue to view the company’s UK entry to be timed to optimize our opportunity in Europe’s largest toy market,” he says. “Whilst we have experienced disruptions to equipment availability in the UK that have delayed operations, we remain on track to launch in the UK market in late August/early September. Three months ahead of the peak selling season is an exciting time to launch into the UK, which is the largest toy market in Europe and the fourth largest globally.”
Under the leadership of WHP Global, owner of the Toys “R” Us brand, a new, double-decker Toys “R” Us global flagship store operated under license by Brooklyn’s Toys 4 U opened at the American Dream mall in New Jersey just before Christmas last year. Toys “R” Us currently exists with more than 900 stores and e-commerce sites operating across 25 countries.
In the U.S., Toys “R” Us departments are set to open in every Macy’s store by Oct. 15.
