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Tag: Fung Retailing

  • Fung Retailing boosts stake in reborn Toys R Us Asia

    Fung Retailing boosts stake in reborn Toys R Us Asia

    Fung Retailing has finally secured a deal to continue to operate the profitable Toys R Us Asia business. The privately owned Hong Kong business, which is separate to the listed Li & Fung, will boost its stake in Toys R Us Asia from 15 per cent to about 21 per cent, making it the retailer’s largest shareholder.

    The balance will be owned by Taj Noteholders representing a mixture of investment funds and financial institutions who have a stake in the collapsed parent company Toys R Us US.

    Toys R Us Asia has never been affected by the liquidation of the US business – it has been trading profitably under Fung Retailing direction and has even been expanding its store network while shops bearing the iconic banner have been closing in post part of the world. Last week it relaunched its store in Brunei.

    The new partnership between Fung Retailing and Taj Noteholders values the company at US$900 million.

    “This transaction is a significant step in separating the valuable and growing Toys “R” Us Asia operation from the rest of the business,” said an unidentified spokesman for Taj Noteholders in a statement.

    “The company’s growth prospects in Greater China, Japan and Southeast Asia are bright and we are excited about investing in and owning the company in partnership with Fung Retailing”.

    Pieter Schats, executive director of Fung Retailing, said that since introducing Toys R Us to Hong Kong in 1986, Fung Retailing has played an integral role in the successful growth and development of the business across Asia.

    “As a sign of the confidence we have in the management team and future success of Toys R Us in the region, we are pleased to increase our shareholding in the company, reflecting our commitment to support Toys R Us Asia in reaching new heights.”

    The company will continue to be led by its current president & CEO Andre Javes and his management team.

    Technology boost

    The new owners of Toys R Us Asia plan a “significant investment in technology” to boost the company’s infrastructure.

    “We are committed to remaining the leading specialty retailer of toy, education and baby products in Asia by driving innovation and quality through our products and services,” said Javes. “The conclusion of the sale process brings clarity to the company’s ownership and we look forward to strengthening and leveraging our partnerships with our vendors and commercial stakeholders. Our shareholders’ investment is a huge vote of confidence in our vision, our team and our winning model.”

    Toys R Us Asia operates more than 450 stores in Japan, Greater China and Southeast Asia, including Brunei, China, Hong Kong, Malaysia, Singapore, Taiwan and Thailand. It also licenses more than 85 stores in the Philippines and Macau.

  • Toys R Us reopened in Brunei

    Toys R Us reopened in Brunei

    Toys R Us Brunei has relaunched its Mabohai Shopping Complex store. The reopening, after extensive redesign and renovation works, attracted long queues of shoppers hoping to pick up special deals promoting the event. Along with the reopening, the store has expanded its product range by 70 per cent.

    Toys R Us (Singapore) group country director Raymond Burt reassured customers the brand is “here to stay”.

    “We have been in Brunei for around six years and we have re-signed our lease here at Mabohai Shopping Complex. We have also reinvested in the store and spent quite a bit of money to bring the latest design of the market to the store. We have renovated the store with a layout that is segmented by age for children, to make it easier for customers to shop.

    “We have updated the design and signage as well as added elements of interactive play that we didn’t have before.”

    Toys R Us operates 67 stores in Asia and has 18 new stores planned for launch by the end of the year, the majority in China. It is part-owned by Fung Retailing and not affected – as yet – by the collapse of the company in the US.

  • Fung Retailing, Alibaba to collaborate bringing lifestyle brands into China

    Fung Retailing, Alibaba to collaborate bringing lifestyle brands into China

    Fung Retailing and Alibaba have formed a strategic partnership to launch more international lifestyle brands in Mainland China. The partnership will bring closer Alibaba’s 600-million user base and Fung Retailing’s 3000+ network of stores across Greater China, UK, France, South Korea, Singapore, Malaysia, Thailand and the Philippines. Its partly- or majority-owned businesses include Circle K and Zoff (under Convenience Retail Asia), Trinity, Toys R Us, Suhyang Networks, the UCCAL Fashion Group and Branded Lifestyle Holdings.

    The Fung Retailing and Alibaba collaboration aims to meet the increasing demand of Chinese consumers, building on the strengths of both parties in online and offline retailing, the two companies said in a statement. At the same time, it will better serve global brands by leveraging Fung Retailing’s global portfolio of brands, offline retail channels and marketing know-how, as well as Alibaba’s ecosystem, digital retail leadership, technology, and consumer insights.

    “That will help global brands tailor their product development and marketing strategies to meet the ever-changing needs of Chinese consumers,” the statement said. “The brands can also draw on Alibaba’s new retail channels, including Tmall and Intime, as well as Fung Retailing’s offline stores, thereby reducing costs, risks, and the time traditionally associated with entering the China market.”

    Photo: At the Fung Retailing and Alibaba MOU signing ceremony this week, from left: Sabrina Fung, group MD of Fung Retailing, Dr Victor Fung, group chairman of the Fung Group; Daniel Zhang, CEO of Alibaba Group; and Toby Xu, VP of Alibaba Group.

    Under a memorandum of understanding signed this week, both companies will join forces in global brand recruitment and offer brands merchandising, marketing and omnichannel distribution services. This collaboration will focus on the mainland China market as a first step, and potentially expand to other regions riding on Alibaba’s platforms.

    Speaking during the signing ceremony in Shanghai, Alibaba CEO Daniel Zhang said Alibaba wants to help global brands expand their foothold in China by fully integrating its New Retail capabilities, big data and technology with Fung Retailing’s “unparalleled advantages in brand and supply chain resources”.

    “We believe this partnership represents the beginning of a new chapter for New Retail.”

    Fung Retailing’s group MD Sabrina Fung said retail is changing exponentially, so it’s important to stay ahead of the curve, which this agreement allows the company to do.

    “Through this exciting strategic partnership with Alibaba, we will help customers navigate the full Chinese retail economy and reach China’s 1.4 billion consumers more easily. In this evolving retail landscape, and faced with changing consumer behavior and disruptive retail technologies, we are focused on developing new ways to do business,” she said.

     

  • Toys R Us battle heads to court

    Toys R Us battle heads to court

    Fung Retailing’s battle with the administrators of bankrupt Toys R Us has ramped up, with the latter company filing an injunction request in US courts this week.

    The Hong Kong company is working to protect its first-right-of-refusal clause on acquiring shares in the Toys R Us Asia business, beyond its existing 15 per cent cornerstone holding. That was a condition of its investment.

    But Toys R Us, well aware that the toy retailer’s strongest and most valuable business unit is the Asian company, want to maximise the gain from its sale through an open auction process, in order to have as much cash as possible to pay creditors.

    Various international media outlets have reported an 85 per cent stake in the Toys R Us Asia business could be worth more than US$1 billion and there have been unconfirmed reports Fung Retailing wants to purchase the entire business, most likely with a private equity partner.

    Toys R Us’ application for an injunction seeks to block Fung Retailing’s attempts to open arbitration over the sale. Toys R Us claims Fung is trying to derail the reorganisation process and Bloomberg has previously reported the US company wants to void the first-right-of-refusal clause.

    Bloomberg observed: “This uncertainty will drive down bids – benefiting Fung (which can then either exercise its right of first refusal … or bid for the asset at a depressed price), but harming the debtors and their creditors (whose primary basis for recoveries will be the value achieved from the Asia JV sale).”

    Toys R Us Asia has more than 220 stores in Mainland China, Hong Kong, Singapore, Thailand, Malaysia, Brunei and Taiwan.

  • Fung Retailing likely to sell Toys R Us stake

    Fung Retailing likely to sell Toys R Us stake

    Lenders owed funds from the collapsed Toys R Us North American business are trying to have a US court force Hong Kong’s Fung Group to sell its stake in the profitable Asian subsidiary.

    According to a report by Bloomberg, for which Fung Retailing did not respond to a request for comment, senior lenders have made an opening bid of US$760 million for Toys R Us Asia, of which Fung Retailing holds 15 per cent. That’s well below the $1 billion the company said in April it was likely to receive for the business several months ago, citing “multiple bids”. But now the company says it has been unable to get any of those bidders to commit, alleging “interference” by Fung.

    The lenders, which include York Capital Management Global Advisors, Barclays Bank and Cerberus Capital Management, plan to essentially swap debt for equity in the Toys R Us Asia business in what is termed a “credit bid”.

    The business goes to auction in a US bankruptcy court next month.

    However, according to Bloomberg, Toys R Us has asked a federal judge to invalidate Fung Retailing’s option giving it first right of refusal to purchase additional shares – and to force the Hong Kong company to sell its stake.

    Toys R Us Asia has repeatedly stressed its business was robust and profitable during the collapse of the US and then UK operations.

    The US toy retailer was unable to restructure its debt after filing for bankruptcy last year and has since progressively closed its operations in North America, the UK and Australia.

    Bloomberg says the liquidation sales may not bring in enough money to cover the cost of the bankruptcy, with suppliers, lawyers and former employees all seeking payment for services they provided after Toys R Us entered Chapter 11 last September.

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  • Toys R Us Asia assures it will not be affected by US’s liquidation

    Toys R Us Asia assures it will not be affected by US’s liquidation

    Toys R Us Asia has repeated earlier assertions that its business will not be affected by the liquidation of Toys R Us stores in the US and UK, amid reports that Australian operations would likely need to close.

    Toys R Us Asia’s joint-venture partner Fung Retailing, which owns approximately 15 per cent of the toy retailer’s Asia-Pacific arm, has clarified that its 400 stores in greater China and Southeast Asia remain open for business.

    “Toys R Us Asia is open for business and continuing to serve our customers as we always do,” Toys R Us Asia president Andre Javes said.

    “We are a financially robust and self-funding retail operation, which continues to significantly grow and invest in this region.

    “Every year we are opening new stores in all our markets and particularly in China where we now operate over 150 stores and will be opening another 30 in the coming months.”

    Toys R Us Asia operates as a separate legal entity to Toys R Us Inc, and according to Fung is “financially independent from all other Toys R Us operating companies around the world”.

    Last week, Toys R Us’s US-based CEO David Brandon was quoted by The Wall Street Journal as saying that the retailer’s 39 stores in Australia would likely be liquidated.

    The Australian operations are currently being run by local MD Dianne Guerreiro, who less than six months ago was charting expansion for the business, outlining a plan to open up to 20 stores in the coming years.

    Toys R Us Australia has also said it is “business as usual” despite the US collapse.

    The US parent announced that it would be winding down the majority of its operations last week after efforts to save the company collapsed when lenders decided not to extend their support for the ailing business.

    The toy retailer, which has more than 800 stores across America, has struggled to keep up with escalating competition from the likes of Amazon and Walmart in recent years, particularly as online shopping has become more prevalent.

    Fung Retailing did not elaborate on its plans for the Asian arm if its US-based partner Toys R Us Inc goes under.

     

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  • JD.com and Fung Retailing form Artificial Intelligence partnership

    JD.com and Fung Retailing form Artificial Intelligence partnership

    JD.com is both the largest e-commerce company in China, and the largest Chinese retailer, by revenue.

    The retailing businesses of the Fung Group are brought together under privately-held Fung Retailing Limited and it is a Hong Kong-headquartered multinational group whose core businesses are engaged in trading, logistics, distribution and traditional and digital retailing.

    The agreement between the two companies calls for the establishment of an AI Boundaryless Retail Center that will oversee and manage cooperative research and development projects, and facilitate the sharing of information and expertise relating to AI technology.

    Leveraging AI, and combining JD.com‘s extensive online expertise and Fung Retailing’s offline expertise, the two companies aim to develop a new retail format for China and Asia.

    This includes creating an AI-driven retail system that seamlessly integrates online and offline retail platforms; developing an end-to-end system that enables the management of products, pricing, storage, order and payment; and enhancing consumer experience through solutions such as AI-driven virtual fitting, unmanned stores and smart shopping assistants.

    Speaking at the signing, Sabrina Fung, Group Managing Director of Fung Retailing Limited said, “When it comes to the future of retail, and driving the customer experience, AI is an essential component. Across our retail portfolio, AI is a focal point and this co-operation with JD will, without doubt, accelerate our progress.”

    Bowen Zhou, Vice President of JD.com and Head of JD’s AI Platform and Research said, “As one of the largest retailers in the world, we believe that figuring out how to deploy AI solutions is critical to our future success. Drawing on Fung Retailing’s global offline retail expertise, this partnership will be important for us as we deliver our retail vision.”

    Other areas of focus within the agreement include cooperation on the construction of AI infrastructure, as well as smart retail, creating AI-driven solutions that break down the barriers between online and offline, and exploring the intersection of AI and fashion.

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  • Toys R Us Asia businesses consolidated

    Toys R Us Asia businesses consolidated

    Toys R Us is unifying its Japanese business with its ventures in Greater China and Southeast Asia.

    Under a new JV agreement with Hong Kong-based Fung Retailing, Toys R Us Japan, which has 160 stores, will be consolidated into Toys R Us Asia.

    The merged business will now be roughly 85 per cent owned by Toys R Us, with the balance held by Fung Retailing. The two companies have been working together since 1985. Toys R Us Asia and its subsidiaries have 223 stores in Brunei, China, Hong Kong, Malaysia, Singapore, Taiwan and Thailand. Toys R Us Asia also licenses 34 retail locations in Macau and the Philippines.

    The combined company’s headquarters will be in Hong Kong, while a regional office will continue working in Kawasaki, Japan. The retailer says the consolidation will allow the company to streamline, as well as accelerate innovation.

    Toys R Us Asia Pacific president Andre Javes will continue to have oversight of the combined businesses, as well as Toys R Us Australia.

    International same-store sales for Toys R Us grew 1.2 per cent in the second quarter of last year, driven by strength in the Asia-Pacific market. However, international sales eased 2.5 per cent in the third quarter.

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