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3/6/2006
10:25 AM
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Goodbyes "R" Us

Amazon.com's partnership with Toys "R" Us was once an example of how the Web pioneer would help brick-and-mortar retailers succeed online. Now, Toys "R" Us is determined to show it's better off going it alone.

A New Jersey court ruling last week lets the company sever an agreement to sell its toys online through Amazon, paving the way for the toy retailer to launch its own Web site. Toy "R" Us sued Amazon in 2004, saying the online retailer violated their deal to make Toys "R" Us the site's exclusive toy seller. Amazon "strongly disagrees" with the ruling but hasn't decided if it will appeal.

The deal shows how much E-retail has changed since the two signed their pact in August 2000. Brick-and-mortar retailers like Circuit City have figured out how to closely link the Web and stores, a strategy Toys "R" Us plans to embrace (though it's closing 75--11%--of its stores this spring). Amazon no longer has to offer exclusivity to attract retailers to its site, and it says this doesn't affect relationships with any other retailers. That's critical for Amazon: 28% of the items sold on the site come from third-party sellers.

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