Toys ‘R’ Us Hit With Antitrust Suit
Toys ‘R’ Us unfairly used its size and clout to keep prices high, the government said Wednesday in announcing antitrust charges against the nation’s largest toy seller.
Toys ‘R’ Us said it would “vigorously contest” the charges in court.
The Federal Trade Commission said Toys ‘R’ Us, facing stiff competition from discount stores and warehouse shopping clubs, used its market strength to force manufacturers to agree to stop selling toys to the warehouses.
“Toys ‘R’ Us has violated the basic principle of fair play,” said William Baer, director of the FTC’s Bureau of Competition.
With 651 stores in the United States, Toys ‘R’ Us is the nation’s largest toy retailer, commanding more than one-fifth of the $19 billion U.S. market.
But the Paramus, N.J.-based retailer has watched sales slide in recent years because of competition from discount retailers like Wal-Mart and Kmart and the warehouse clubs. In February, it announced it was closing 25 stores worldwide.