Investor Jitters Push Amazon, Toys 'R' Us Shares Down

Share this content:
Rumors that toy retailer Toys 'R' Us is attempting to renegotiate its 10-year joint venture with Inc. have made investors in both stocks nervous.

Shares of Seattle-based Amazon yesterday were down 8.01 percent to $14.48, while Toys 'R' Us saw a 6.89 percent drop to $18.91. The drops came the same day Toys 'R' Us reported quarterly earnings were down 37 percent to $284 million, excluding previously announced restructuring and other charges.

Paramus, NJ-based Toys 'R' Us is struggling to keep up with offline rival Wal-Mart Stores Inc., now the No. 1 seller of toys nationwide.

But Toys 'R' Us' online store is not doing too badly. sales were up 24 percent in the last quarter and up 54 percent for the year. Operating losses fell to $17 million from $54 million in the comparable period. While the losses were not disclosed, losses were down $42 million for the year.

Still, the market was not happy, having expected to break even by the fourth quarter.

" and continue to work closely together to realize efficiencies and to reduce costs in the online business," a Toys 'R' Us statement said.

Yesterday's volatility in the two stocks was the result of a report on financial news service that Toys 'R' Us wanted to lower the fee and percentage of profit it pays Amazon.

Amazon and in August 2000 partnered to operate The Web site sells toys, video games and baby products in this strategic alliance designed to help both companies compensate for their weaknesses.

Under the agreement, Amazon provides site development, order fulfillment, customer service and houses inventory in its warehouses. will identify, buy and manage inventory.

While it is not known how much Toys 'R' Us pays Amazon, market scuttlebutt puts the figure at $100 million a year.

Calls to Amazon and Toys 'R' Us were not returned.


Next Article in Multichannel Marketing

Sign up to our newsletters

Company of the Week

USAData helps businesses find new customers and grow their current customers through a combination of data and digital marketing services, and easy-to-use SaaS technology products. We enrich customer data so businesses can more effectively target and communicate with customers, and connect them with their best look-alike prospects through digital and traditional channels. We make it easy through simple, self-serve applications and APIs, as well as through full-service programs managed by our Data and Digital experts. 

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above