Toys R Us shares have been placed in a trading halt as the company raises capital for its expansion into the UK.
The company said the halt is to allow capital raise to take place “in an orderly manner” and will be in place until an announcement is made on Monday, June 19.
This comes days after the company announced its new CEO Penny Cox.
Since March, the toy company has slashed $4 million in costs, relocated its office and bulk warehouse operations to a new, purpose-built distribution centre in Clayton, Victoria, which will allow the company to scale fourfold, and has launched a partnership with UK department store WH Smith to open a number of in-store Toys R Us mini-stores.
Toys R Us managing director Louis Mittoni said in March that 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,” Mittoni said.
“Outside of the US [the UK] is one of the largest toy market globally; it is the largest in Europe,” he said.
“We have put in a lot of significant one-off costs. But that investment is really to help drive the UK and Australian operations because we expanded our facility here, we consolidated everything.
“The message really is we are really at the beginning, we have only just started in the UK, two months into the peak season with really minimal inventory as well.
“So once we start to optimise these things through this calendar year it is a massive opportunity because we have really only just scratched the surface.”
