plans  $800 million IPO

By Adele 

 May 28,2010

Company Background

• based in Wayne, N.J.• first went public in 1978• taken private in a $6.6 billion 2005 buyout

by investors led by Bain Capital, Kohlberg Kravis Roberts and Vornado Realty Trust. 

• as of Jan. 30, 2010, had 1,363 stores and licensed an additional 203 stores in 34 countries under its namesake brand and as Babies "R" Us and FAO Schwarz. 

Measures to increase customer traffic and sales• Install a new management team• bought rivals such as FAO Schwarz and online toy

retailers such as eToys.com. • converted or relocated existing stores into an

integrated format featuring its namesake • open temporary locations, or so-called pop-up

stores in holiday seasons•  bolster relationship with manufacturers• Improve store appearance and merchandising• carrying the right products at the right time and

at the right price • increase exclusive and higher-margin private-label

merchandise and improve its customer service

About this IPO

• Aim to raise $800 million,but that number is used to calculate only a registration fee, so the final amount of the deal could vary.

• a bid to take advantage of its business turnaround even in a rocky IPO market

• will be one of the biggest retail IPOs in years

• have to price the offering wisely as many IPO this year underperformed

• hard to attract investors, as the company has long-term debts of $5.2 billion

• plans to use the net proceeds of the offering to pay down some of its debt, but does not give specifics.

Challenges

• competition from Wal-Mart to Amazon.com

•  Toy retailing remains very competitive, especially since half of the industry's sales are done in final three months of the year, and discount retailers use low prices in the toy category to draw in traffic

• in aftermath of the economic crisis

Bibilography

• http://bagtheweb.com/b/gF6xP7