Toys retailer Toys‘R’Us (ASX: TOY) has announced strategic initiatives to streamline operations and enhance market presence. The move comes as the Company seeks to address challenges within the UK market by exiting it and positioning itself for growth.

One aspect of the Australia-licenced entity’s restructuring plan is a proposed 10:1 Share Capital Consolidation. This move is designed to consolidate shares and potentially elevate the Company’s ASX share price. Moreover, it aims to increase the Company’s visibility in the US market by lifting the US broker USD$0.01 floor price restriction to activate further US market exposure and trading. 

Other components of the restructuring program include a comprehensive overhaul of the cost structure, reduced aged inventory, improved technological capabilities and new sales channels, including physical retail. Additionally, Toys‘R’Us aims to improve the measurement of operational key performance indicators to drive efficiency and effectiveness across its operations.

As a precedent for what it aims to achieve with its ANZ branch, the Company pointed to the success of its US counterpart. According to the investor presentation released by the ANZ Toys R Us, CEO of Macy’s, Jeff Gennette, quoted a substantial market opportunity of $1 billion in annual sales coming out of the retailer’s partnership with the US Toys‘R’Us. It saw an uptick in toy sales, with a 15 times increase on Q1 2022 compared to the corresponding period preceding the Toys‘R’Us partnership as an example of what the Australian-based business hopes to achieve, albeit with zero affiliation with Macy’s. 

The ANZ Toys‘R’Us also aims to revitalise its brands for the omnichannel age by using customer databases, implementing dedicated merchandise and marketing strategies, and adopting a shared services operations model. Furthermore, it targets specific customer demographics to drive engagement and loyalty.

The acquisition of RIOT’s art and craft assets for about $600k was also part of its renewed business, improving its position in the e-commerce market and expanding its portfolio with complementary products across lucrative categories. The acquisition consideration comprised a mix of cash and TOY scrip. RIOT’s extensive customer base, including about 540,000 retail and 2,400 wholesale customers, is expected to complement TOY’s demographic, enabling cross-marketing opportunities.

Looking ahead, Toys‘R’Us is focused on executing its strategic initiatives, including the integration of RIOT assets, expansion into new sales channels, and delivering growth in key categories, such as the Baby segment slated for late 2024. The Company also plans on capitalising on potential partnerships for shop-in-shop opportunities to further augment its market presence and drive revenue growth.