Amazon and Toys "R" Us have parted company.
From the Seattle Post-Intelligencer:
Toys "R" Us wins fight to end partnership with Amazon
Toys "R" Us will be allowed to dissolve its fractious agreement with Amazon.com, according to a decision today in the Superior Court of New Jersey, where the two retailers have been duking it out since May 2004.
"We strongly disagree with the judge's ruling in this case and are currently in the process of reviewing a number of different options," said Amazon.com spokeswoman Patty Smith. "My understanding from the ruling is that nothing effectively changes for another 90 days -- keep in mind, we supplement our existing toy inventory with items not carried by (Toys "R" Us), with items from a number of third party sellers such as eToys and Discovery Channel, and the ruling does not affect our relationship with these other parties."
Amazon's toy store, though, is dominated by Toys "R" Us offerings: a search of the site revealed 17,387 offerings from the toy giant, compared to 95 items from the Discovery Channel and 526 items from eToys.
Smith declined to comment on whether the Seattle-based Internet retailer would seek to overturn the ruling, strike another agreement with Toys "R" Us, or seek new partners to supplement its toy inventory.
A spokeswoman from the Wayne, N.J.-based Toys "R" Us said it is too early to say how its site would change, except that after the 90-day separation period, visitors to the site would no longer be directed to Amazon.com when ordering. "At this point, we are talking with some experienced potential partners, but it is premature to discuss it," said spokeswoman Kathleen Waugh. "We're the largest seller of toys on the Internet in the U.S. and committed to maintaining that position."
And a bit more:
The partnership between the two retailers, struck in August 2000 and supposed to last 10 years, is a telling example of how badly wrong such plans can go: at its conception, the deal was lauded as a blueprint for future alliances between brick and mortar retailers and 'pure play' e-tailers. Instead, it soon slipped into bitter accusations.
Toys "R" Us claimed that Amazon misled the company into believing it had the exclusive right to sell toys on its Web site. Amazon, in turn, said Toys "R" Us couldn't keep up with consumer demand, causing hot items to run out of stock.
Toys "R" Us had no clue just how powerful a marketing opportunity the Internet was, their management still considered Brick and Mortar stores to be the "wave of the future". Finally, clearer heads prevailed and the quickest way they could get online was partnering with Amazon. They botched that up by treating Amazon as a second-rate partner, shipping hot items to the stores and ignoring the fact that the customer placing the order through Amazon was a valid customer too. And now, they are re-adjusting. They have a large store in Bellingham that is closing, one of 73 that they are closing nationwide.
