Bankrupt Toys R Us on Thursday won approval from a Virginia bankruptcy court to sell the majority stake of its Asian business operations to a group of investment firms and Fung Retailing Ltd. for $760 million, according to court documents.
Fung Retailing, which previously owned about 15% of a Hong Kong-based joint venture compromising Toys R Us' Asian operations, has been in an open battle since September with Toys R Us over the circumstances of the continued operations.
The iconic toy retailer's Asia operations include more than 450 stores in 10 markets, with the largest presence in Japan and China, according to multiple media reports.
The move to salvage Toys R Us' remaining stores in Asia last week was largely procedural, as the deal was first reported in mid-November and hinted at in September. In the spring, Reuters reported that Toys R Us' Asian operations could fetch up to $1 billion, but a tussle with senior lenders knocked that price significantly lower.
The Asian operations are anticipated to be especially lucrative in China's market, where spending on kids hit $142 billion in 2017, according to research from Mintel. Yet, Toys R Us will likely need to remake itself to hit a stride with consumers. International same-store sales fell 1.6% last year, a figure that includes declines both in European and Asian sales, according to the retailer's final 10-K filing.
The retailer's bankruptcy last year has led to wariness from suppliers, lost shoppers searching for new toy outlets and a race by retailers to dive headfirst into the category, at least for the holiday period.
But as Toys R Us slowly fades out of the U.S. retail landscape — with the exception of Geoffrey the Giraffe branded toy boxes at Kroger — it has also successfully spun off its Canadian and various European units, while liquidating others, including in the U.S., United Kingdom and Australia.