Toys R Us will open 10 stores to take on Smyths
Toys R US is taking on Smyths Toys in Ireland, with plans to open 10 outlets within the next five years.
Brian Donoghue, who has secured the licence from the US group to operate Toys R Us here, said the group will spend over €5m opening five outlets over the next year.
The first is due to open in Blanchardstown, Dublin, at the start of next month. A second will open at the Parkway Centre in Limerick in October. About 60pc of a typical toy store's sales are generated in the run-up to Christmas.
Mr Donoghue is the former chief operations officer at Smyths Toys. The Irish Toys R Us arm is also being backed by businessman Harry Slowey, and former NCB and IIU director Chris McHugh.
Mr Slowey was a senior director at Bank of Scotland's now defunct Irish arm, and is the co-founder of Dublin-based financial advisory firm Finance One. He's also a former Guinness Peat Aviation executive.
Speaking to the Irish Independent, Mr Donoghue said that he believes Toys R Us can take on Smyths Toys in its home market, where it's been the dominant toy retailer for years.
He said Argos and Tesco also compete in the sector.
Smyths Toys is owned by the Smyth family. The business started in their Mayo grocery shop. The retail group now has over 70 shops between Ireland and Britain.
"Next year, we're looking at opening in Cork, and possibly two more outlets in Dublin," said Mr Donoghue.
Mr Donoghue left Smyths Toys in 2013. Following discussions with Toys R Us, the group, which has outlets across Britain and swathes of Europe, agreed to award him the franchise to operate outlets in Ireland.
Mr Slowey and Mr McHugh have contributed €750,000 between them to the venture, with Mr Donoghue having stumped up €450,000.
Mr Donoghue said he was previously acquainted with Mr Slowey and Mr McHugh and invited them to invest in the business. Toys R Us has not provided any capital, but has warrants over 20pc of the Irish division, with an option to boost its stake to 51pc in certain circumstances.
Mr Donoghue said his preference would be to ensure that Toys R Us remains a minority shareholder in the business.
He's been working with Green Property to secure sites.