Toys 'R' Us shuts Hyderabad store within 24 hrs of opening over legal issue

American toy and clothing retailer Toys 'R' Us is said to have shut within 24 hours a store it opened in Hyderabad to mark its second entry into India over some legal complexities with the mall owner, sources said.

Toys 'R' Us opened a store in Sarath city Capital mall in Hyderabad on March 11 but closed it within 24 hours, two sources with knowledge of the matter said.

Emails sent to the company, as well as its Indian operator and the mall owners, remained answered.

Sources said a no-compete clause with another global toy retailer is said to be behind the mall pulling the plug on Toys 'R' Us.

Just like cola brands Coke and Pepsi are seldom retailed from the same restaurant, the no-compete clause meant the two competing toy retailers could not operate in the same mall. The other retailer already had a shop in the mall.

Toys 'R' Us has been launched in India in two formats - Toys 'R' Us, which is the world's leading toy store, and Babies 'R' Us, a one-stop destination for baby essentials.

It is run by a Bangalore-based firm, Ace turtle, which entered into a joint venture with the Flipkart Group's wholesale entity in India to acquire the licence for Toys 'R' Us and Babies 'R' Us in June 2021.

The toy retailer had made an unsuccessful entry into India in 2017 when it tied up with Tablez India, a division of Abu Dhabi-based Lulu Group International, for an exclusive master franchise agreement.

It launched the global toy brand in India in October 2017 with plans to open 200-plus stores. But it could managed to open only 14 stores which wound up within three years of operations.