The retailer is consolidating its businesses in Japan, Greater China and Southeast Asia.
Under a new joint-venture agreement, Toys R Us Japan— which operates 160 stores in the country—will be consolidated into Toys R Us Asia. The combined business will now be approximately 85% owned by Toys R Us, with the remaining share held by Fung Retailing. The two companies have been working together in the region since 1985.
Toys R Us Asia and its subsidiaries operate 223 stores in Greater China and the Southeast Asia markets. This includes stores in Brunei, China, Hong Kong, Malaysia, Singapore, Taiwan and Thailand. Toys R Us Asia also licenses an additional 34 retail locations in the Philippines and Macau.
The combined company’s headquarters will be located in Hong Kong, while a regional office will continue to operate in Kawasaki, Japan. Andre Javes, president of Toys R Us Asia Pacific, will continue to oversee all operations of the combined businesses, as well as Toys R Us Australia.
According to the retailer, the consolidation will allow the company to streamline operations and accelerate innovation. A strengthened focus on the Asia-Pacific market makes sense for Toys R Us, as the region has previously been a source of growth for the company. International same store sales grew 1.2% in Q2 2016, driven by strength in the Asia-Pacific market. However, international sales declined by 2.5% in Q3, thanks to softness in Asia Pacific and European markets. The company’s international same store sales during the 2016 holiday season decreased 4.9%, also driven by the European and Asia Pacific markets.