Smyths Toys acquires more than 90 Toys “R” Us stores in Germany, Austria and Switzerland

Smyths Toys has agreed to acquire more than 90 Toys “R” Us stores in Germany, Austria and Switzerland for an undisclosed sum, in a move that will almost double the size of the Irish family-owned retailer.

While no financial details have been disclosed, analysts estimate that Smyths Toys will acquire the stores for an enterprise value of around €80m, on a cash-free and debt-free basis, and an estimated aggregate purchase price of €79m, of which as much as €37m may be escrowed at closing with release subject to certain conditions. Smyths Toys could not be reached for comment.

The acquisition will take the group’s network to around 200 outlets in Ireland, the UK and, now, the German-speaking market. The deal marks a coup for Smyths Toys in its expansion drive, cementing its position as one of the largest toy retailers in Europe.

The group said in a statement that all of the outlets acquired will be rebranded, bringing the Smyths brand to continental Europe for the first time.‘We are convinced that multi-channel toy retailing will develop positively and that we can successfully introduce and expand our brand in Europe,’ said Smyths’ co-founder Tony Smyth. ‘Toys “R” Us in the DACH region is profitable, has a strong management team and many loyal customers. That’s a great starting point for our expansion.’

Last month, Toys “R” Us announced it was liquidating its US business. The deal with Smyths Toys is subject to regulatory approval of the United States Bankruptcy Court for the Eastern District of Virginia.

In recent years, Smyths Toys has spearheaded an expansion into the UK market, a move that has become somewhat less lucrative since the decline of the pound in the wake of the Brexit vote. As a result, it makes sense that the firm would turn its attention to continental Europe, particularly Germany, due to the size of the market.

‘After an extensive sales process, I am very happy that Smyths Toys has won the bidding process for our business,’ said Detlef Mutterer, managing director of Toys "R” Us in Central Europe. ‘Smyths Toys is a proven leader in the retail industry, achieving strong growth in recent years.’ (ssk)