Toys ‘R’ Us and Reggies changes ownership
JOHANNESBURG – Toys ‘R’ Us and Reggies new owners saw the opportunity of moving from the distribution of toys and baby products to selling them to the rest of Africa when its founders decided to sell Redgwoods, the owner of these companies five months ago. Mohsin Mia and Christian Larsen who bought Redgwoods, which owns Toys R Us and Reggies stores, took ownership on December 1 plan to expand the group’s current 65 stores in South Africa to outlying areas and to other parts of Africa within the next year.
Despite the group’s established presence in South Africa its new owners still want to introduce new stores into areas outside of their current targeted markets. Most of their stores are located in CBDs; the plan is to expand into outlying areas with a change in the size of the stores to meet the different consumer needs.
South Africa provides a platform for the already successful business to expand into Sub-Saharan Africa as well as the rest of Africa, the toy stores’ new owners said. Mia says that South Africa has the infrastructure to support their future expansion plans and in addition to that they plan to keep South Africa as the export entry point as they want the growth opportunities to benefit the country.
Zimmerman says that the new owners have extensive experience in logistics and distribution and that makes them a good choice to take over the business.
Mia said they plan to utilise their China operations to keep the cost of their products down; as a retailer, it is important for them to be able to source quality products at a lower cost and efficiently and being able to pass that on to the consumer.
One of the major challenges currently facing the business and presenting a possible concern for the expansion plans into Africa is the replenishment cycle. It currently takes a number of days to deliver products to stores. But this is where Mia and Larsen’s previous business know how in distribution will come into play. Mia says that they are looking at how they can rework their distribution plan.
They will also want to leverage off their on-line store, launched in 2008, which Zimmerman indicates made a modest contribution to profits in the past. Mia suggests the group will be looking to see how it could utilise the on-line platform as it expands into Africa.
Reggies was founded in South Africa in 1972 and Toys ‘R’ Us is a US brand which Redgwoods holds the license to operate in Southern Africa. In 2001 Issy Zimmeram left insurance brokering and partnered up with Maurice Sacher who spearheaded the negotiations to acquire Toys ‘R’ Us and Reggies from the Aquila group in 2002.