David BicknellUS toy retailer Toys R Us this week showed how e-business can
wreck your company's annual results.
The company, which is hoping to tie up a distribution deal with
online pioneer Amazon, announced second quarter profits of around
$3m on its bricks-and-mortar activities.
Without its Web site the comany would have had profits of $16m,
suggesting that the online operation was responsible for costs of
$13m.
Toysrus.com hopes to break even in the fourth quarter of 2001
and be profitable in 2002.
The Amazon deal will see the two companies teaming up to launch
a new co-branded online toy and video game store, as well as a site
selling baby goods.
The toy store is scheduled to be launched this autumn, with the
baby products store due to follow next year.
The two companies have already signed a 10-year agreement under
which Toysrus.com will identify, and manage the product inventories
to be sold through the two new sites, while Amazon will be
responsible for Web site development, order fulfilment and customer
service.
