2013.04.0102:44:26UTC+00Toys 'R' Us drops IPO amid declining sales

Toys "R" Us Inc. set aside its plans for an initial public offering on Friday after almost three years amid slumping sales and heavy competition from online players.

The Wayne, N.J., retailer filed plans for an initial public offering, which was pegged to increase almost $800 million, in May 2010.

Toys "R" Us was bought in 2005 by real-estate giant Vornado Realty Trust and private-equity firms Bain Capital LLC and KKR & Co. LP for $6.6 billion. The take over kick-started efforts to streamline its brands, which also include Babies "R" Us and FAO Schwarz, remodel existing stores and boost its online business. The reestablishing effort brought in former Target Corp. (TGT) executive Gerald L. Storch as chairman and chief executive.

But tough economic conditions mixed with structural shifts in the industry have provoke the retailer. They have been battling other big-box retailers and online rivals such as Amazon.com Inc. (AMZN) for a bigger slice of consumer pocketbooks, but also lately the threat displayed by mobile devices that battling physical toys.

A call to the legal counsel for Toys "R" Us was not returned right away.

Last month, the company declared that Mr. Storch will step down as CEO. On Friday, Toys "R" Us stated its fiscal fourth-quarter earning dropped 30% on higher interest and tax expenses, as well as declining sales.

The company didn't outline a reason for the withdrawal in documents filed with the Securities and Exchange Commission.

Private-equity backed deals have been coming to the IPO market fast and furious in latter months. Financial sponsors ushered 11 deals to market in the first quarter, improving $3.12 billion, more than a third of the IPO market, according to Dealogic.

Toys "R" Us becomes the second high-profile IPO to fall out of the pipeline in recent months. In January, the owner of AutoTrader.com and Kelley Blue Book brands surrendered its estimated $300 million offer, citing market conditions.