Reporting its first quarter results, Toys `R’ Us Inc. , said that
sales at Toysrus.com more than tripled and that it will be migrating its
Babiesrus.com e-tail operation to Amazon.com this month in a
reprise of the
deal that it worked with the online giant last August.
The toy company said that online sales were $29 million compared to $8
million for the 2000 first quarter and added that the “Amazon.com alliance is
allowing (the company) to focus on continuing to build its online business,
and it is confident that sales from this business will continue to grow at a
rapid pace.”
The Toysrus.com operation, net of minority interest, lost $24 million in the
first quarter, compared to a loss of $14 million in the year-ago quarter.
The alliance with Amazon.com was structured so that the Toysrus.com site will
serves as a gateway that redirects users to the new outlet’s location on
Amazon. In fact, typing in “www.toysrus.com” takes a user directly to the toy
store on Amazon.
The same will soon be true for the online baby-oriented e-commerce site.
Toys ‘R’ Us said that it recorded significant additional costs in the 2001
first quarter related to its online business in comparison with the year-ago
period. A portion of these costs relates to maintaining and operating the
Babiesrus.com Web site and distribution facility. However, with the migration
to the Amazon site some of these duplicative costs will be eliminated.
Also, the company said that as anticipated, the fixed costs associated with
its Amazon alliance have a much higher impact on operating earnings in the
lower revenue generating first three quarters of the year. The company said
it expects to see this trend decrease dramatically beginning in the third
quarter of this year as it cycles the alliance with Amazon and as its revenue
stream increases.
Babiesrus.com was launched in July last year and features site features thousands of infant and
baby products, an online/off-line gift registry, a customer return program at
the company’s brick and mortar baby stores nationally, and a variety of
online resources for new and expectant families.
Overall, Toys ‘R’ Us reported a first quarter loss of $18 million, or 9 cents
per diluted share, compared with a year-earlier profit of $215 million, or 93
cents a share.
However, the company “is well-positioned to deliver positive results in the
fourth quarter of fiscal 2001,” said John Eyler, president and CEO.
Toy Sales ‘R’ Up
