Toys R Us sales jump under new ownership following corporate collapse

The resurrected retailer has ambitious plans to capture a 5 per cent slice of the toys, baby and hobby market.

The ASX-listed Toys R Us is resurrecting the failed toy retail brand online and plans an expansion into Britain as it books strong sales growth in January and over the second quarter.

Toys R Us sales surge as the online retailer ramps up its bid to grab 5 per cent of the toy, baby and hobby markets.

The company, which is listed on the ASX, said it had also put in place key executives in Britain as it prepares for market entry, with an e-commerce launch scheduled for mid-year to address a significant near-term growth opportunity for Toys R Us in that region.

The business had experienced minimal supply chain disruptions in 2021, eliminating its reliance on pallets – which had been in short supply through the Covid-19 pandemic last year – and by shifting to a dispatch model that dispatched consignments with its Australia Post partnership.

In a trading update for the second quarter and first half of 2022, Toys R Us said it achieved robust growth in order volumes as the company delivered into seasonally strong trading conditions.

For the three months to January 31, sales soared 86 per cent to $8.5m from a year earlier as orders jumped 65 per cent to 72,600. The average order value was up 22 per cent to $115.70.

Online sales for its Toys R Us website up 136 per cent in January from a year earlier.

Under a capital raising and reverse takeover last March, the company once known as Funtastic acquired the Australian e-commerce websites for Toys R Us, Babies R Us, Hobby Warehouse and tech distributor Mittoni.

Owner and businessman Louis Mittoni, who founded the Hobby Warehouse Group and whose collection of retail businesses that was injected into the ASX-listed Funtastic vehicle, pledged to revitalise the company that included the resuscitation of the collapsed Toys R Us and Babies R Us chains.

The maiden full-year results for the group showed reported revenue of $21.8m but consolidated proforma annual revenue was $48.2m for fiscal 2021 and including the newly acquired businesses of Hobby Warehouse, Toys R Us, Babies R Us and Mittoni.

On Tuesday, the company said it continues to pursue its aspirations of driving top line growth and deploying capital efficiently to achieve its medium-term goal of 5 per cent market share penetration in the toys, baby and hobby markets in all licensed regions.

“Our teams have made consistent progress with the implementation of updated warehouse management systems and robotics, migration of business platforms, and the formation of our senior UK team,” said Mr Mittoni, chief executive of Toys R Us.

“These accomplishments are vital to the long term strength, capability and growth prospects of the company.

“The company plans to accelerate and scale with Toys R Us, Babies R Us and Hobby Warehouse operations in Australia, and relaunch Toys R Us and Babies R Us in the UK in mid calendar 2022 with sufficient capability to meet shopper demand through to the peak trading season.”

Toys R Us shares were up 3.9 per cent to 13.5c on the ASX just after midday.