Toys R Us withdraws proposed initial public offering
(Reuters) - Toys R Us Inc TOY.UL withdrew its proposed initial public offering on Friday, ending months of uncertainty as the world's largest dedicated toy retailer also issued a quarterly report card showing disappointing results for the crucial holiday season.
Toys R Us determined not to pursue the IPO due to unfavorable market conditions and executive leadership transition, Toys R Us spokeswoman Kathleen Waugh told Reuters.
Waugh did not give an update on the company's search for a new CEO. In February, Gerald Storch decided to step down as Toys R Us chief executive, but he remains chairman of the board.
The withdrawal of the IPO would not affect the toy retailer's day-to-day operations, Waugh said, but declined any further comment.
The resignation of Storch, 56, added to doubts about the retailer's chances to return to being a public company this year, after filing for an initial public offering in May 2010.
KKR & Co LP (KKR.N), Bain Capital and Vornado Realty Trust took Toys R Us private in 2005, in a $6.6 billion deal.
While the company's results were far better when it was originally considering the IPO, some owners thought they would be able to raise more if they waited, a source had told Reuters. But the results have lagged expectations since then.
The company had postponed its IPO in 2011 due to weak market conditions and has since struggled with mounting interest expenses and weak sales. Sources had told Reuters in February that chances of this IPO happening were low.
Toys R Us, which operates stores under its namesake brand and the Babies R Us and FAO Schwarz names, said total sales fell 3 percent in the fourth quarter to $5.77 billion while interest expense jumped 35 percent in the 14 weeks ended February 2. Net profit fell 30 percent to $240 million.
The company's performance in 2012 was hurt by a weak global economic environment, particularly in Europe and Japan, Storch said in a statement.
Toys R Us first went public in April 1978 and operated as a public company until July 2005, when it was taken private.