Irish toy giant Smyths Toys has injected €175 million into its mainland European business to drive its expansion after the unit became the most profitable in its international network in 2020.
Recently filed accounts for the group’s German, Austrian and Swiss entity, Smyths Toys EU HQ Unlimited Co, show that it recorded pretax profits of €10.97 million in 2020 as sales jumped 4 per cent to €475.35 million.
Overall, the family-owned group, which has its headquarters in Galway, enjoyed its busiest year to date in pandemic-hit 2020, with the group recording record sales of €1.465 billion.
The European business accounted for 42 per cent of group pretax profits of €26 million in 2020.
Smyths operates 114 stores across Germany, Austria and Switzerland, with the bulk bulk of those – 88 – in Germany. The group also operates 113 stores in the UK along with 21 in the Republic.
Across its network, the toy retailer employed almost 6,000 staff at the end of 2020, with 2,288 of those in its mainland European unit.
The capital injection gives Smyths Toys the financial firepower to continue its expansion in mainland Europe. At the end of 2020, Smyths Toys EU HQ Unlimited Co had only €1 million in authorised capital, a figure that has increased now to €176 million.
The company had a deficit of €7.2 million in its shareholder funds at the end of 2020.
Company directors confirmed that Smyths Toys outlets in Austria and Switzerland were “performing strongly” after their reopening in 2021.
The capital injection comes almost four years after Smyths Toys moved to purchase the Toys R Us store network in Germany, Austria and Switzerland in 2018 to facilitate its European expansion.
The European business has enjoyed rapid growth since the purchase, with 2020 sales of €475.35 million, 40 per cent ahead of the €339.67 million the entity turned over in the first 13 months after the Toys R Us purchase.