Court Frees Toys "R" Us From Amazon.com Contract - InformationWeek

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Court Frees Toys "R" Us From Amazon.com Contract

Toys "R" Us says its agreement to sell toys on online retailer Amazon.com Inc. has been severed by a New Jersey court, paving the way for the toy retailer to launch its own Web site.

Toys "R" Us Inc. on Thursday said its agreement to sell toys on online retailer Amazon.com Inc. has been severed by a New Jersey court, paving the way for the toy retailer to launch its own Web site.

The Chancery Court untied the companies in a decision handed down Thursday, essentially freeing Toy "R" Us from its August 2000 contract, the toy company said.

Toys "R" Us executives hailed the ruling as a victory, and said the company planned to launch a retail site that would operate in conjunction with its stores.

"We have been preparing for today's decision and expect to provide seamless online access for our customers to the world's greatest toy store at www.toysrus.com," John Sullivan, senior vice president of Toysrus.com, said. "Tighter integration of our online business with our brick and mortar locations will enhance customer service by creating a more unified web and retail shopping experience."

Amazon.com was unhappy with the ruling and weighing its options.

"We strongly disagree with the judge's ruling in this case, and we are in the process of reviewing a number of options," Amazon.com spokesman Craig Berman said.

Toy "R" Us sued Amazon.com in 2004, saying the online retailer had violated their contract by no longer making the toy retailer the sole seller of certain categories of toys. The online retailer countersued a month later, claiming Toy "R" Us had repeatedly failed to meet its obligations, including maintaining sufficient stock. Amazon.com, which sought $750 million in damages, also challenged Toy "R" Us's argument that the contract made it the exclusive toy seller.

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