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Amazon Opens Web Toy Store

July 06, 2006|From the Associated Press

SEATTLE — Amazon.com Inc. said Wednesday that it had begun offering its own toys and baby items following a judge's ruling that ended its retail partnership with Toys R Us Inc.

The online retailer's new online "store" also will include expanded inventory from partners such as Target Corp., spokeswoman Patty Smith said.

In March, a New Jersey Superior Court judge found that Amazon.com breached a deal to give Toys R Us exclusive rights to supply some toy products on Amazon.com. The ruling allowed the companies to sever their online partnership.

Toys R Us has since hired GSI Commerce Inc. to provide technology and customer support for its own Web-based toy and baby products sales.

Amazon.com is appealing the court decision in an effort to reinstate the online retailing deal. Smith would not comment on how that litigation might affect the toy and baby offering.

In June, the Seattle-based online retailer lost a bid to have the breakup halted while it appealed the court decision. In a regulatory filing, the company said operating profit could be hurt by as much as $50 million for all of 2006, including $25 million in the second quarter ended June 30, mainly due to not receiving fees from Toys R Us.

Amazon.com forged the partnership with Toys R Us in 2000 after stumbling in its own efforts to sell toys online during the 1999 holiday season. Smith said the company had since learned a lot about managing toys inventory.

"That was a long time ago," Smith said, noting that the company already operates its own online toy stores in Britain and Germany.

Smith said the new offering would give customers twice the selection it offered while partnering with Toys R Us.

Amazon.com shares fell $1.50, or 3.9%, to $37.11.

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