Toys R Us Sues Amazon.com

Smith declined to comment further.

Amazon's deal with Toys R Us was a breakthrough at the time. For Toys R Us, which had struggled with its online efforts to that point, the deal immediately catapulted it into the leading position in selling toys online.

Last year, the toy company's online division posted an operating loss of $18 million on $376 million in sales. Toysrus.com's sales represented just 3% of the revenue posted by its parent company. But while sales at the company's domestic bricks-and-mortar stores has slumped in the last two years, Toys R Us' online sales have grown by more than 10% in each of the last two years.

For Amazon, the deal represented one of the e-commerce company's first forays into hosting Web stores for other vendors. Amazon has since signed deals to host stores for Circuit City (CC), Target (TGT) and Borders (BGP), among others.

For Amazon, such deals typically lead to higher profit-margin sales than it gets from products it sells directly.

Share of Toys R Us closed regular trading on Monday up 33 cents, or 2.2%, to $15.44, while Amazon.com's stock rose 46 cents, or 1.1%, to $41.63.

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