Toys"R"Us combines Asia and Japan operations

Toys "R" Us has officially announced it is unifying its business in Japan with the business in Greater China and Southeast Asia. The move consolidates the brand's Japan division Toys "R" Us, with Toys"R"Us Asia Limited, which oversees stores in Greater China and Southeast Asia.

Toys"R"Us Asia is a Hong Kong-based joint venture of Toys "R" Us and Southeast Asian retail giant Fung Retailing Group. It currently operates 223 stores in Greater China and the Southeast Asian markets covering Brunei, China, Hong Kong, Malaysia, Singapore, Taiwan and Thailand and licenses an additional 34 stores in the Philippines and Macau.

Under the new move, Toys"R"Us Asia said it will be advantageously positioned to maximise the synergies arising from the integration. It has also planned to add 160 stores in Japan to form a pan-Asia network of specialty toy chain stores.

The chairman of the Fung Group, Victor K. Fung, said the goals for the combined business are to leverage the synergies between the businesses, and delight a new generation of consumers with significant purchasing power across the region.

"The inclusion of Japan's Toys'R'Us into Toys'R'Us Asia will allow the management team to leverage and create opportunities to more effectively manage inventory management, logistics and sales channels across Asia, as well as expand omni-channel retailing, thereby achieving greater efficiencies and benefitting from each other's experience and expertise," Fung said in the statement.

Toys"R"Us was first introduced to Asia by Fung Retailing in 1985 under a licensing agreement with Toys"R"Us, Inc. in the United States. After the merger with Toys"R"Us Japan, Fung Retailing will own approximately 15% of the enlarged joint venture.

"This expansion marks another milestone for Toys'R'Us as a global company," said Dave Brandon, chairman and chief executive officer 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. We look forward to working more closely with Fung Retailing, our trusted and valued business partner, in our mission to be the best toy and baby products retail company for the world."

"We have seen growth in expenditure on children 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," added Andre Javes, President, Toys"R"Us, Asia Pacific.

"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.