The retailer has extended its European footprint with a deal to take over 41 PicWic stores, 2 warehouses and an office in France.
Smyths has fought off fierce competition to take over PicWic Toys’ French operation, creating the largest toy retailer in Europe in the process. The PicWic brand was initially created in 1977 by Stéphane Mulliez, first cousin of Gérard Mulliez, the founder of Auchan. The chain took over the running of the French Toys R Us stores in 2019.
The group, which was owned by Romain Mulliez and the American fund Cyrus Partners, was forced to undertake restructuring in 2020, resulting in the closure of 18 stores and the reduction of a third of its workforce.
Trading conditions as a result of the pandemic, together with competition from the web, supply challenges and, according to the unions, insufficient financing at the time of the merger in 2019, ultimately put PicWicToys in difficulty. At the end of 2020, PicWicToys recorded a loss of 88m euros on a turnover of 237m euros, a significantly larger loss than the retailer had posted in 2019, when it lost 32m euros. The business was finally placed in receivership at its own request on May 23rd this year.
Yesterday afternoon, the court in Lille announced that Smyths has been appointed to take over the running of the business, while a spokesperson from Smyths contacted Toy World to confirm that the retailer had been successful in its bid, and would be “taking over 41 stores, two warehouses and a head office.” Smyths Toys already successfully operates 138 stores in the UK & Ireland, together with 93 stores in Germany, Austria and Switzerland.
Around fifteen offers were said to be on the table, with Smyths fighting off offers from Hermione subsidiary People & Brands; Foir’Fouille & Centrakor and a conglomerate of seven toy and leisure players, including JouéClub, Kingtoy, Orchestra, Intersport, Lidl and B&M.
Éric Feldmann, president of the Commercial Court of Lille Métropole, commented: “It was Smyths Toys that made the most interesting and reassuring offer. It ensures the economic sustainability of the project and the takeover of 632 employees, from the current total of 763. The group will provide 9m euros in compensation for creditors and contributes 300,000 euros to the job protection plan. Finally, to ensure the smooth running of the company, Smyths Toys will deposit 50m euros into the current account within 15 days.”
As it already operates the Toys R Us business in Germany and Austria, in addition to being the leading toy retailer in the UK and Irish markets, Smyths was always a strong contender to take over the PicWic Toys business, and the global toy industry will be relieved that a major European specialist toy retail operation has been saved from disappearing by one of the industry’s leading global retail players.
The Smyths spokesperson added: “We started the business more than thirty years ago and are very grateful to our customers, our employees and our suppliers for the support we have received in that time. We are convinced about the future of multi-channel specialist toy retail and are confident that we can successfully introduce and grow our brand in France. We welcome the team and loyal customers of PicWic into the Smyths Toys Group, which provides a great starting point for our expansion.”