By Chris Dieterich and Kristin Jones
NEW YORK--Toys "R" Us Inc. dropped its plans for an initial
public offering on Friday after almost three years amid withering
sales and heightened competition from online players.
The Wayne, N.J., retailer filed plans for an initial public
offering, which was pegged to raise around $800 million, in May
2010.
Toys "R" Us was purchased in 2005 by real-estate giant Vornado
Realty Trust (VNO) and private-equity firms Bain Capital LLC and
KKR & Co. LP (KKR) for $6.6 billion. The acquisition
kick-started efforts to streamline its brands, which also include
Babies "R" Us and FAO Schwarz, remodel existing stores and bolster
its online business. The rebuilding effort brought in former Target
Corp. (TGT) executive Gerald L. Storch as chairman and chief
executive.
But difficult economic conditions combined with structural
shifts in the industry have challenged the retailer. They have been
battling other big-box retailers and online rivals such as
Amazon.com Inc. (AMZN) for a bigger slice of consumer pocketbooks,
but also--more recently--the threat presented by mobile devices
that rival physical toys.
A call to the legal counsel for Toys "R" Us was not immediately
returned.
Last month, the company announced that Mr. Storch will step down
as CEO. On Friday, Toys "R" Us said its fiscal fourth-quarter
profit fell 30% on higher interest and tax expenses, as well as
lower sales.
The company didn't outline a reason for the withdrawal in
documents filed with the Securities and Exchange Commission.
Private-equity backed deals have been coming to the IPO market
fast and furious in recent months. Financial sponsors ushered 11
deals to market in the first quarter, raising $3.12 billion, more
than a third of the IPO market, according to Dealogic.
Toys "R" Us becomes the second high-profile IPO to fall out of
the pipeline in recent months. In January, the owner of
AutoTrader.com and Kelley Blue Book brands dropped its estimated
$300 million offer, citing market conditions.
Write to Chris Dieterich at
christopher.dieterich@dowjones.com;
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