Amazon Seeks Divorce, $750M from Toys R Us

theodp writes "Responding to a Toys R Us lawsuit accusing Amazon of breaching exclusivity provisions of its $50M-a- year tenancy agreement, Amazon has countersued the giant toy retailer, asking the Court to terminate its Toysrus.com partnership and award it damages of more than $750M, arguing that Toysrus.com's failure to effectively choose top toys and baby products and to keep products in stock leaves Amazon with no other choice but to enable more sellers to sell these products."

Comments

No fun being on a sinking ship

[erick99]

Toys R Us is a company that is failing against it's competition, particularly WalMart, and Amazon knows it. Amazon doesn't want to be on a sinking ship so they break/bend the rules and then, when Toys R Us crys "foul," Amazon says, well, uh, "they suck at choosing toys and we have lawyers too...so there." Stupidity versus greed. Good old fashioned contest with no real winners.

Happy Trails!

Erick

Re:No fun being on a sinking ship

[mumblestheclown]

You have told a nice story. It makes sense; it's logical. It's also full of shit. It's a complete invention that you made up to tell a story that fits your world view. Unfortunately, your world view is not the real world.

Do a tiny bit of research on Toys R Us stock price over the last 5 years. Yes, it went up during the dot com days and then fell back down, but other than that it has been remarkably steady. Clearly, it is no 'sinking ship.' Actually, it is the best brand in toy retailing and the category leader there, having beaten the living snot out of Kaybee Toys, Kiddie City, and others over the years.

To call Toys-R-Us stupid is just you telling a story that does not exist; or, at least, the facts don't seem to bear it out.

You may be right about the amazon greed bit though; they did not seem to consider that a mutual exclusivity contract can cut both ways..

Re:No fun being on a sinking ship

[Anonymous Coward]

It won't be long before Amazon is losing ground against mega retailers online (Wal-Mart).

Why in the world would Amazon purposely get rid of friends when facing the prospect of going head to head with Wal-Mart online. If I were Amazon I'd wanna be making deals with all kinds of brick & mortar retailers.

Re:No fun being on a sinking ship

[man_ls]

It has to be a sinking ship because 5 TRU locations I was aware of previously are all boarded up abandon wrecks now.

I don't know of a single brick and mortar TRU location nearby any more.

Re:No fun being on a sinking ship

[bdptcob]

I'm going to have to agree. I worked for a company that handled the phone based orders about four years ago. They were constantly out of stock on their product.

Re:No fun being on a sinking ship

[Anonymous Coward]

I read several years back how TRU was to consolidate their stores all into one, the other 2 being Kids R Us (mainly a clothing store for youngin's) and Babies R Us (Well a store all about baby supplies).

It was a restructuring deal that was going on at the time but i honestly never saw it come to fruition. In a shopping district close to me they had all 3 stores located within a 5 mile radius of each other. Both ToysRU and KidsRU closed down and boarded up. But BabiesRU is still selling the baby goods and never has diversified into offering what the other 2 stores sold.

But look back (into the 80's) at how quickly Lionel Playworld (precursor to TRU who at the end was bought by TRU) went under when it became outsold by the mega-retailers of its time like Zayre's, Richway, and Kmart. TRU was expanding nationwide with new venture capital and was able to push them out and buy them up at the end. Now it seems to be coming full circle.

With brick and morter stores from now and forever its going to be they come and they go. One kills off and buys up the next, rinse, repeat. Even Sears, being THE oldest national retailer in the US has had to consolidate, restucture, close down, and rebuild numerous times throughout the years to survive. I think its all associated with the process of store, business model, or shopping demographic aging through the times in some form.

Wal*Mart as it stands has embarked on trying to outrun the beast by closing down stores when they get old and building brand new ones nearby. We are about to be on our 3rd area Wal*Mart in 20 years here where i live. Going from Wal*Mart, to Super Wal*Mart, to Super Meglomania Wal*Mart. Trust me, I know, they just bought the 220 acres of pristine woodlands behind my parents house to pave over for the new incarnation at which i can say i will see abondoned in 8-12 years.

Re:Since when does exclusive not mean exclusive?

[synx]

What did the contract say exactly? "Exclusive" can mean several things. Apparently the deal was to maintain exclusivity in SKU, not product line. I guess Amazon's defense is that they didn't have someone else sell the same SKU, but was in the same category.

Re:With toys like the Nimbus 2000...

[hadesan]

Links to the old reviews captured at mlcsmith and another set of old reviews and finally a trial test at the toy factory

Re:Anyone wanna bet

[LostCluster]

The Toys 'R Us-Amazon partnership started after the 1999 holiday season failure of ToysRUs.com because the .com operation accepted every order attempted and simply sent backorder notices... meaning many parents got caught with orders that wouldn't be filled until after Dec. 25, and as result the company had to rush out gift cards so that parents could pick up something at the retail stores to avoid making a mess of their whole brand in the process.

Re:Not sure who to root for

[waswaldo]

'crappy ColdFusion'? Oh my god, whoever feed you that line was blowing hot air. Please name a technology available in early 1998 that could scale to 10,000 concurrent users which a team of four people could implement in four months. Right, there wasn't any! While CF had a lot of issues, it was *not* the cause of the Amazon deal. It was solely due to warehousing issues.

You may have 'a friend with inside contacts', but I was the Team Lead who wrote much of the TRU website. The CF code base was cutting edge; incorporating an in-memory cache for thousands of items on hundreds of servers. We reviewed and rejected TimesTen - ours was better. The shopping cart (Hi Chad!) was the *most* advanced in the world enabling many different types of discounts and bundles. Our Content Management system used Portal concepts (moving portlets around the page, columns to organize dynamic info) way before Portals were well understood.

My name is David Medinets, google away if you doubt me.