The retailer hopes to raise $8m capital for new growth plans, as news emerges of Toys R Us ANZ CEO Louis Mittoni’s resignation.
Toys R Us has unveiled plans to build one of the largest toy and baby stores in Australia as part of expansion plans that also include launching pop-up shops in more department stores around the world.
According to The Sydney Morning Herald, the company has launched an $8m capital raising, in hopes of generating cash for new growth plans including opening a 3000-square-metre retail hub at its Melbourne headquarters in Clayton. Of the $8m that Toys R Us is aiming to raise to make this new megastore a reality, $3m is proposed to be used to fund the opening of the new retail site.
Following the resignation of Louis Mittoni in May, Penny Cox, who has held roles at Coles, Ocado and Alibaba, will relocate from Singapore in August to take up the chief executive role at the company.
Toys R Us also detailed further expansion plans, including increasing its network of pop-up shops within existing retailers around the world. The brand entered Macy’s department stores as part of a trial in the middle of 2022 and has now rolled out 450 Toys R Us “stores” within stores in the Macy’s network.
Another $3m of the capital would be used to support the rollout of new pop up shops in the United Kingdom, after the launch of nine trial stores in WH Smith High Street shops.
Chairman Kevin Moore said the brand was open to similar partnerships in Australia. “We’re always open-minded,” he said. “There are many retailers in Australia who would love to have increased footfall into their stores.”
The company plans to offer existing shareholders a chance to buy new shares at 1.1¢ each, a 20% discount to where the stock closed at the end of last week.
Kevin Moore said the latest site in Australia, next to the group’s state-of-the-art logistics centre, would be modelled on the US flagship Toys R Us store that opened in the American Dream Mall in New Jersey in 2021. “When that store went in, it highlighted the fact that Toys R Us as a store [still] had a place in retail,” he said.
A custom-designed store at Clayton would include both the Toys R Us and Babies R Us retail brands and also include a cafe, have activities for children and give the public the opportunity to watch the company’s robot-driven warehouse in action.
Kevin described the store as “hands-on” for kids, and added that the site would also be a significant revenue and profit driver. It is forecast to deliver $7m in annual turnover and add $1.3m in profits to the business in its first year.