Toys”R”Us and Hong Kong-based Li & Fung Retailing have entered into a joint venture to own and manage the Toys”R”Us licensed operations throughout almost all of Asia.
The US toy retailing giant will take a 70 per cent stake in the new venture, Li & Fung the balance of 30 per cent.
The agreement covers more than 100 stores and offices across nine markets. Effective immediately, the joint venture will include 90 existing Toys”R”Us stores in Brunei, mainland China, Hong Kong, Malaysia, Singapore, Taiwan and Thailand. These stores will be considered wholly owned operations of Toys”R”Us, increasing the number of the company’s wholly owned international locations by 17 per cent.
The remaining 14 stores in the Philippines and Macau continue to be operated under a license agreement.
“Li & Fung has been a terrific partner in establishing and growing the Toys”R”Us brand in Asia, and we are pleased to continue our work with them as we enter this exciting next phase of our business development there, said Jerry Storch, chairman and CEO of Toys”R”Us in a statement issued overnight.
“We believe there is significant growth opportunity for our company in this region, and we look forward to an aggressive expansion of our business in both existing and new Asian markets, including Northern China,” said Storch.
“International growth remains a key part of our long-term business strategy, and we are proud to celebrate this important milestone for our company.”
The joint venture will include ownership and oversight of office operations in all nine markets, as well as the regional headquarters in Hong Kong. More than 350 employees who had previously been part of the licensed operation will now become Toys”R”Us, Inc. employees. An existing network of eight distribution centers in Asia will be used to stock its Toys”R”Us stores.
Toys”R”Us retains the right to acquire the remainign 30 per cent of the operation from Li & Fung.
Dr Victor K Fung, chairman of the Li & Fung Group, said his company had successfully established more than 100 Toys”R”Us stores across Asia over the past 25 years and built a Star Card loyalty program membership topping 3 million across the region.
“We are pleased to return to the joint venture arrangement with Toys”R”Us in anticipation of the next phase of business growth. The new agreement will enable us to expand into additional geographies such as Northern China, which will help us leverage even further growth in the region,” he said.
Toys”R”Us, Inc. opened its first international locations in 1984 with wholly owned stores in Canada and a licensed store in Singapore and has continued to grow its operations around the world. The Toys”R”Us business in Asia grew in 1986 when Li & Fung Retailing opened the first Toys”R”Us store in Hong Kong at Ocean Terminal in a joint venture with Toys”R”Us, Inc. This joint venture was converted to a licensing business in 1999.
Toys”R”Us, Inc. now operates more than 600 wholly owned locations in the UK, Japan, France, Germany, Spain, China and Canada, among others. In addition, the company currently has more than 140 licensed Toys”R”Us stores through agreements with respected retail partners around the globe.
Toys”R”Us is the world’s largest dedicated toy and juvenile products retailer, its products sold in 873 Toys”R”Us and Babies”R”Us stores in the US and Puerto Rico, and in more than 600 international stores and over 140 licensed stores in 35 countries and jurisdictions.
The company also runs the legendary FAO Schwarz brand and sells extraordinary toys in the brand’s flagship store on Fifth Avenue in New York City.
Li & Fung (Retailing) Limited, a member of the privately held Li & Fung Group, was formed in 1985, its retail operation not related to the listed Li & Fung Limited. Li & Fung Retailing owns the Circle K convenience stores and Saint Honore Cake Shops in Southern China along with Trinity Limited, a leading high-end luxury menswear retailer primarily serving Greater China.
Li & Fung Retailing’s businesses extend from Greater China to South Korea, Singapore, Malaysia, Thailand, Indonesia and other Southeast Asia countries through a combined network of over 1100 stores
