By Eamon Quinn
The acquisition by Smyths Toys of the 93 Toys R Us stores and online operations in Germany, Austria, and Switzerland propels the Irish-based retailer into the largest of its type in Europe, with the deal adding significant financial clout and likely to be only the start of a further growth spurt, the company has signalled.
It comes as the retailer faces down a potential squeeze on consumer spending power in Britain, because shoppers there have been hit badly by the slump in sterling, since the UK voted to quit the EU, almost two years ago.
Over the weekend, Smyths said that it had agreed to buy 90 stores, as well as three online operations, in the three continental European countries, which almost doubles its number of outlets.
The company said the deal was worth about €80m.
Across Ireland and the UK, the retailer operates 110 toy stores and online shops.
The financial figures for its stores in the Republic are hard to come by, because the publicity-shy, Galway-based directors, Tony, Liam, Patrick, and Thomas Smyth, keep those under wraps, under a company holding structure that has unlimited status and is therefore required to publish scant financial numbers.
Nonetheless, its seven stores in the North doubled net profit to £758,000 (€863,257) ), as sales jumped by £6m, to £39.7m, in 2016, according to financial figures filed by Smyths Toys NI Ltd last September.
In Britain, Smyths Toys UK Limited doubled its net profit to £8.78m, on sales of £396.5m in the same period.
Last month, Toys R Us gave up on plans to exit from US bankruptcy and decided to shut down its UK operations, too.
Director Tony Smyth said that selling toys through stores and online had a great future.
“The Toys R Us business is profitable, has a strong leadership team, and already has many loyal customers.
“It provides a great starting point for our expansion,” he said.