Smyths Toys new European division generated almost €14m profits

Ninety-three stores in Germany, Switzerland and Austria bought last year by Smyths Toys had sales of at least €340 million and generated profits before tax of €13.6 million, according to accounts filed in Dublin.

Sales at its 21-strong Irish division also rose by more than 6 per cent last year to €226 million, separate accounts show.

Taken together with the £581.5 million (€673 million) in sales for 2018 recently reported by Smyths UK, the combined figures confirm that the overall group owned by the low-profile Smyth family from Mayo blazed well past the €1 billion annual sales barrier when it expanded into Europe last year.

Accounts filed this week for Smyths Toys EU headquarters cover the near 14-month period from its incorporation until the end of 2018. In May 2018, it paid €61.6 million for the three individual companies in Germany, Switzerland and Austria, which had previously traded as Toys R Us until the US parent went bust.

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Referring to last May’s deal date, the accounts say the performance European subsidiaries “are consolidated from that date”, but it does not specifically state if the sales recorded cover just the seven months of 2018 following the deal, or whether an entire year’s performance is captured.

The accounts show the new European operations – 66 stores in Germany, 11 in Switzerland and 16 in Austria – added 2,500 staff to the Smyths group. The acquisition brought a €45.5 million deferred tax liability to the group, as well as a €26.6 million pension liability related to the German and Austrian operations.

Separate accounts this week filed by Smyths Toys Unlimited detail the performance of its stores in the Republic. It generated profits of almost €5 million on its €226 million sales. The Irish division employs about 624 people.

Smyths has since begun to expand in the central European market, after earlier this year completing the rebranding of the former Toys R Us stores. In June, it opened a new Smyths superstore in Munich while it is also expanding existing outlets, such as its store in the town of Hanau, near Frankfurt.

The group is also building a new €40 million, 50,000 sq m distribution facility in northern Germany, as it brings its “big box” retailing model to the continent.

The European deal cemented Smyths position as the third-largest indigenous Irish retail group, after Dunnes Stores and Musgrave.