MANILA – The Philippine unit of retailer Toys ‘R’ Us will continue operations even after store closures in the United States, where the American company filed for bankruptcy.
“It is business as usual for Toys ‘R’ Us Philippines. The Philippine operations is profitable and so is the operations of Toys ‘R’ Us Asia where Toys ‘R’ Us Philippines is a sub-licensee,” Robinsons Retail Holdings, Inc. (RRHI) Vice-President for Corporate Planning and Investor Relations Officer Gina Roa-Dipaling said in an e-mail.
Gokongwei-led RRHI operates the Toys ‘R’ Us stores in the Philippines.
Toys ‘R’ Us, Inc., which oversees operations of the toy retailer in the United States, filed for bankruptcy back in September 2017. Last week, the company announced it will be closing down more than 700 stores in the country.
The US company said it will also conduct a reorganization and sale process for its Canadian and international operations in Asia and Central Europe.
Asian operations are managed by an 85-15 joint venture between Toys ‘R’ Us, Inc. and Fung Retailing Ltd. through Toys ‘R’ Us (Asia). Toys ‘R’ Us (Asia) has over 200 stores across Greater China and Southeast Asia. Of this, 35 are located in the Philippines and Macau.
“Announcement will be made soon on this matter for the Asia operations,” Ms. Roa-Dipaling added.
The closure of Toys ‘R’ Us’ stores comes amid the so-called “retail apocalypse” in the US as brick-and-mortar stores struggle to compete with the booming e-commerce industry.
A study released by Credit Suisse last May 2017 projected that around 25% of US malls, or 275 shopping centers will close by 2022. A separate report by BusinessInsider tallied that more than 3,600 stores will close this year alone, across brands such as Walgreens, Sears, Guess, Crocs, and Michael Kors, among others.
In contrast, retailers and shopping mall operators in the Philippines are unlikely to experience the same situation any time soon, as real estate consulting firm Leechiu Property Consultants (LPC) earlier noted the differences between these markets.
LPC’s report in 2017 stated that malls in the Philippines are part of the Filipinos’ lifestyle, making the experience more intimate unlike the typical big- box malls in the US.
RRHI grew its attributable profit by 5.76% to P3.49 billion in the first nine months of 2017, following a 9.93% increase in revenues to P82.87 billion for the period.
Shares in RRHI were down by P2.50 or 2.87% to P84.50 at the Philippine Stock Exchange last Friday.