Toys R Us is planning to built a 3000sqm “experiential retail centre” in Clayton, Victoria that will be attached to its new purpose-built logistics and head office facility.

The company is currently raising up to $8 million through an Entitlement Offer, according to papers filed with the ASX, with $3 million of this to be invested in the centre, which will house both its Toys“R”Us and Babies“R”Us brands.

According to the toy company, the new store is anticipated to be one of the largest toy & baby stores in Australia, forecast to deliver $7 million in annual trading – adding a $1.3m in profit contribution to in its first full year of trading.

Toys R Us managing director Louis Mittoni said families don’t consider toys and hobbies a discretionary item.

“They still need to buy Christmas presents and birthday presents, and we haven’t seen any adjustment in the amount that people are spending.”

Since March, the toy company has slashed $4 million in costs, relocated its office and bulk warehouse operations to the Clayton centre, which it says will allow operations to scale fourfold.

It has also launched a partnership with UK department store WH Smith to open a number of in-store Toys R Us mini-stores.