Joint Venture Agreement with Li & Fung Retailing Provides Significant Opportunity for Further Expansion in New and Existing Asian Markets
WAYNE, N.J., Nov. 1, 2011 /PRNewswire-Asia/ -- Toys"R"Us, Inc. and Li & Fung Retailing today announced they have entered into a joint venture agreement for the Toys"R"Us® business 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 percent majority owned and controlled by Toys"R"Us, Inc. and 30 percent 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, mainland 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 percent. 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 all nine 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 its Toys"R"Us stores.
The Chairman of the Li & Fung Group, Dr Victor K Fung said, "Over the past 25 years we have opened over 100 Toys"R"Us stores across Asia. This successful business has benefited from high brand awareness and the recruitment of nearly three million members in our Star Card loyalty program in the markets we operate. We are pleased to return to the joint venture arrangement with Toys"R"Us, Inc. in anticipation of the next phase of business growth. The new agreement will enable us to expand into additional geographies such as Northern China, which will help us leverage even further growth in the region."
Toys"R"Us, Inc. opened its first international locations in 1984 with wholly owned stores in Canada and a licensed store in Singapore and has continued to grow its operations around the world. The Toys"R"Us business in Asia grew in 1986 when Li & Fung Retailing opened the first Toys"R"Us store in Hong Kong at Ocean Terminal in a joint venture with Toys"R"Us, Inc. This joint venture was converted to a licensing business in 1999.
Toys"R"Us, Inc. now operates more than 600 wholly owned locations in the U.K., Japan, France, Germany, Spain, China and Canada, among others. In addition, the company currently has more than 140 licensed Toys"R"Us stores through agreements with respected retail partners around the globe.
About Toys"R"Us, Inc.
Toys"R"Us, Inc. is the world's leading dedicated toy and juvenile products retailer, offering a differentiated shopping experience through its family of brands. Merchandise is sold in 873 Toys"R"Us and Babies"R"Us stores in the United States and Puerto Rico, and in more than 600 international stores and over 140 licensed stores in 35 countries and jurisdictions. In addition, it exclusively operates the legendary FAO Schwarz brand and sells extraordinary toys in the brand's flagship store on Fifth Avenue in New York City. With its strong portfolio of e-commerce sites including Toysrus.com, Babiesrus.com, eToys.com and FAO.com, it provides shoppers with a broad online selection of distinctive toy and baby products. Headquartered in Wayne, NJ, Toys"R"Us, Inc. employs approximately 70,000 associates annually worldwide. The company is committed to serving its communities as a caring and reputable neighbor through programs dedicated to keeping kids safe and helping them in times of need.
About Li & Fung Retailing
Li & Fung (Retailing) Limited, a member of the privately held Li & Fung Group, was formed in 1985 as a wholly owned subsidiary of the privately held Li & Fung (1937) Limited. All the retailing businesses under Li & Fung Retailing are not related to the publicly listed Li & Fung Limited (SEHK: 494).
Under Li & Fung Retailing there are two listed entities: Convenience Retail Asia Limited (SEHK: 00831), operator of the Circle K convenience stores and the Saint Honore Cake Shops in Southern China; and Trinity Limited (SEHK: 00891), a leading high-end luxury menswear retailer primarily serving Greater China.
In addition to the listed entities there are other privately held businesses including LiFung Children (Holdings) Limited with a business focus on apparel, footwear and accessories for children.
Li & Fung Retailing's businesses extend from Greater China to South Korea, Singapore, Malaysia, Thailand, Indonesia and other Southeast Asia countries through a combined network of over 1,100 stores