Toys 'R' Us ends Dutch franchise deal
By Staff -- Playthings, 3/2/2009 9:38:00 AM
WAYNE, N.J.—Toys “R” Us is leaving the Dutch toy market effective today.
“Toys ‘R’ Us Inc. and its franchisee partner (Speelhoorn B.V.) have reached a mutual agreement to end the Toys ‘R’ Us franchise business in the Netherlands as of March 2, 2009,” a TRU spokesperson told Playthings today.
According to Dutch media reports, Speelhoorn will continue to operate its 17 formerly Toys "R" Us-branded stores under a new name, Toys XL.
Toys ‘R’ Us came to the Netherlands in 1993, boasting “they would conquer Holland and take a market share of 25 percent within three years,” Jan Sinke, editor of Dutch toy trade magazine Speelgoed en Hobby, told Playthings. “But after four years Toys ‘R’ Us had to give up the Dutch market because the formula did not work in the Netherlands.”
Sinke said TRU’s “crucial mistakes” were trying to run the Dutch market from Germany; and misjudging Holland’s retail structure, which was largely in hands of the Blokker Group, operator of toy store chains Bart Smit and Intertoys. TRU tried unsuccessfully to sell its Dutch operations to Blokker in 1997 but regulatory concerns derailed the deal, although Bkokker was allowed to take a minority share of the TRU operation.
“Besides that,” Sinke added, “Dutch consumers do not like to shop in big stores with shelves to the ceiling.”
Toys “R” Us’ operations shortly thereafter wound up in the hands of a private equity firm, De Hoge Dennen Capital, in which Blokker had a 20 percent share. The company was later restructured, according to Sinke, “and in fact only the name Toys ‘R’ Us was kept, but the shops looked totally different from the normal Toys ‘R’ Us concept.”
Toy.com domain purchase
In other Toys “R” Us news, the retailer last week was the highest bidder in an auction of the Internet domain name Toys.com. TRU paid $5.1 million for rights to the address, beating out generic domain name holding company National A-1, according to published reports.
Taking a page from GameStop
And video game news site Kotaku reported that TRU is several weeks into a test of used video game sales and buybacks at what a TRU spokesperson called “a couple of stores in the New York metro area.”
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