Does Toysrus.com Have 1.9 Million SF on the Block?

Amazon and Toysrus Merge Online Operations... On August 10, 2000 Amazon.com and Toysrus.com announced that they will combine operations. According to the SEC filing, "Toysrus.com will identify, buy and manage inventory; Amazon.com will handle site development, order fulfillment, and customer service, housing both Toysrus.com's and its own inventory in Amazon.com's U.S. distribution centers." This raises an intriguing question. What will happen to Toysrus.com's distribution centers?

Oops. Just four months ago, April 10, 2000, Toysrus.com said that it would open two new fulfillment centers in addition to its Memphis, TN facility (500,000 sf). These new facilities would be located in Chambersburg, PA (700,000 sf) and Mira Loma, CA (760,000 sf). That's a total of more than 1.9 million sf. I don't know if the reference is to these facilities exactly. But, according to the New York Times, August 11, 2000, "Toysrus.com will sell its three distribution centers, which analysts estimate it had spent $50 million to build." ... No, I do NOT know whom to call!

The other interesting part of the story is that online customers will "no longer be able to return toys to stores, as Toysrus.com customers have been able to do. Conversely, though, most will no longer have to pay sales tax." ... Hmm. So much for combining bricks and clicks. Would this give the edge to Wal-Mart selling toys online? Do customers care more about lowest price or convenient returns? Will online sales eventually be taxed? ... Time will tell.

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--Peter Pike