The rumour has been around for a while and now Orchestra's top executive Pierre Mestre has confirmed it: he intends to take over the French branch of toy chain Toys'R'Us and become France's absolute number 1 on the children's market.
Thee interested parties
Toys'R'Us France got into serious trouble after the failure of the American mother chain and has been placed into receivership some time ago. The commercial court of Evry will decide on October 3rd on a possible new start of the toy chain under the umbrella of a new owner. Two candidates had already officially reported their interest earlier on: a Galeries Lafayette franchisee who is also intersted in taking over La Grande Récré (that other ailing French toy chain), and creditor Cyrus, which closed a collaboration deal to this end with Picwic, the toy chain of the Mulliez empire (Auchan, Leroy-Merlin and others).
The rumour that Orchestra (which previously acquired the Belgian company Premaman) is interested in the toy chain has been circulating for a few weeks. In a conversation with Le Figaro and specialised website LSA, Mestre has now confirmed it. He intends to 'personally' take over 38 of the 53 outlets and 907 of the 1,152 employees. Mestre also plans an investment of 60 million euros to make the chain rise from the ashes. He has obtained a deal with American investment fund Pimco to achieve these goals.
Crossed franchise agreements
"Both corporations will continue to exist independently in the first phase, but they will be linked to each other through crossed franchise agreements," reveals the top executive. "There will be a joint product range for both chains, whereby Orchestra will provide apparel and articles for children and Toys'R'Us will provide the toys." If the judge greenlights the takeover, Mestre still has to take care of an important detail: the brand name Toys'R'Us is currently owned by the American debtor of the failed toy chain. That party did close a deal with the acquirer of the Spanish branch of Toys'R'Us, allowing for the use of the brand name in exchange for 1.5 percent of the turnover.
Mestre adds that if he fails to close a deal with the American rights holder, the acquired company will be renamed 'Orchestra & Toys'. Whether the name of the toy chain will change or not, each outlet will be setting aside at least 5000 ft² of store space for apparel. "Both markets are complementary," claims Mestre: "Clothes provide traffic all year round, while toy stores lose money from January to October. In addition, the children's fashion market is less internet-sensitive than the toy market."
Interesting sidenote: Orchestra already ran clothing corners at Toys'R'Us from 2007 to 2013. That collaboration came to an end because the toy chain refused to offer more store space.