Toys"R"Us Preparing for IPO?
The holiday season is looking up for Toys"R"Us. After two quarters of strong sales this year, Toys"R"Us is hopeful the positive momentum continues into the fourth quarter, in which it typically generates 40 percent of its annual revenue and operating income. These signs of a turnaround at the toy retailer have it considering its options, including an initial public offering. Toys"R"Us has been cutting costs as of late, including selling off FAO Schwarz and closing down its bigger storefronts, perhaps to make itself more attractive to buyers.
Total Retail's Take: Toys"R"Us seems to be moving in the right direction for the first time in a while. Because of this, its private equity bankers — Bain Capital, KKR & Co. and Vornado Realty Trust — may be enticed to sell while the going is good. This holiday season, while critical to a lot of retailers, takes on even greater importance for a brand like Toys"R"Us. The future of the company, and whether it continues to operate as a private company or goes public, could very well be decided in the next three months.