WAYNE, N.J. — Toys“R”Us announced that it has entered into a joint venture with Li & Fung Retailing that would make Toys"R"Us Inc. the majority shareholder of Toys"R"Us operations in Southeast Asia and Greater China. With this agreement, the existing Toys“R”Us licensed operations throughout Asia, which currently consist of more than 100 stores and offices across nine markets, will become 70% majority owned and controlled by Toys“R”Us Inc. and 30% owned by Li & Fung Retailing. The terms of the joint venture also allow Toys“R”Us Inc. to acquire the remaining share of the business in the future.
Effective immediately, the joint venture will include 90 existing Toys“R”Us stores in Brunei, China, Hong Kong, Malaysia, Singapore, Taiwan and Thailand. These stores will be considered wholly owned operations of Toys“R”Us Inc., increasing the number of the company’s wholly-owned international locations by 17%. 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. 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 Jerry Storch, chairman and CEO, Toys“R”Us Inc. “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 seven 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 Toys“R”Us stores.