Toys R Us's U.S. headquarters is under bankruptcy protection, but its Asian business may be going public

by:Ennas      2022-01-07
Toys R Us (Toys R Us) US headquarters is in the bankruptcy protection stage, but their Asian business may be going public. According to a Bloomberg report, Toys R Us and their Asian business partners, Fung Kwok-ching and Fung Kwok-lun, the chairman of the board of directors of the Hong Kong Fung Retail Group, are discussing with investment banks the possibility of a separate IPO for the Asian business on the Hong Kong Stock Exchange. , And the valuation of the IPO is about US$2 billion.  **In recent years, the Asian market with growing consumer income has become one of the most important markets for Toys R Us. In April of this year, in order to streamline operations and accelerate innovation, they integrated their businesses in Japan, Greater China, and Southeast Asia, making Toys R Us Asia become the United States Toys R Us and Fung Group holding 85% and 15 shares respectively. % Of joint ventures, the number of stores has reached more than 400.   Unlike the headquarters in crisis, Toys R Us has performed well in Asia. Although the operating data of the Asian market was not separately disclosed in the financial report, at the investor meeting in the second quarter, CFO Michael J. Short stated that the growth of the Asia-Pacific market offset the poor performance of other markets, and also emphasized the performance of Japan and China. Strong growth. According to data from market research firm Euromonitor Consulting, in the US$20.7 billion Asian traditional toy market, Toys R Us has a market share of 20%, while the second-ranked company only accounts for 1.4%.   And the expansion of Toys R Us is concentrated in the Asian market. For example, at the end of September this year, they opened 10 new stores in mainland China at the same time.   However, it is still doubtful whether the Asian business of Toys R Us can be listed separately.   After the US headquarters announced the bankruptcy protection process, Andre Javes, CEO of Toys R Us Asia, emphasized that they are independent of the headquarters: We are a fully funded, fully self-funded retail organization that is growing significantly and investing heavily in this area. However, it is obviously not an easy task to convince investors that the US headquarters of Toys R Us, which has 5 billion US dollars in debt and may go bankrupt at any time, will not affect Asian companies at all.   In addition, although Toys R Us has the largest market share in the Asian traditional toy market, they are still facing the sluggish physical retail industry, competition from video games, etc. These factors will also affect the IPO.   Currently Toys R Us, its owner private investment companies KKR, Bain and Vornado, and Feng Group all refused to respond to this news.   (Source: Li Lirong, Curiosity Daily)    Keywords: Toys R Us    Recommended reading: Business Tiger China
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