Amazon opens baby store

May 23, 2001: 2:54 p.m. ET

Online retailing leader extends its partnership with Toys 'R' Us

NEW YORK (CNNfn) - Online retailing leader Amazon.com launched a new baby goods section of its Web site Wednesday as part of its partnership with Toys 'R' Us.

The new online store, which carries the Babies 'R' Us name, will replace the Babiesrus.com Web site, through which Toys 'R' Us sold its baby goods.

The co-branded baby store will operate under the terms of a 10-year strategic alliance between Amazon.com and Toys 'R' Us announced in August 2000.

Under terms of the agreement, Toys 'R' Us assumes the merchandising, planning, buying and inventory management of the store's baby and juvenile products. For its part, Amazon.com manages all aspects of the online shopping experience, including Web site development, order fulfillment and customer service. Amazon.com also will house the inventory in its U.S. distribution centers.

The arrangement is similar to the one Amazon has with Toys 'R' Us for its core toy business.

Financial terms were not disclosed.

Last August, Toys 'R' Us, the No. 2 U.S. toy seller behind Wal-Mart Stores, and its Toysrus.com Web operations inked a 10-year deal with Amazon to sell toys, video games and other products through Amazon's electronic store.

"Our alliance with Toysrus.com has proven to be a great win for customers, and we've looked forward to taking the next step by introducing the new Babiesrus.com teamed with Amazon.com store since we forged the alliance last August," Amazon founder and CEO Jeff Bezos said.

"By teaming with Babiesrus.com, we're able to bring customers vast selection and category expertise from the world's leading resource for baby products and a partner that shares our passionate focus on customer experience," Bezos added.

The new co-branded Babies 'R' Us store gives customers access to the Babies 'R' Us registry. Customers who set up registries at one of 145 Babies 'R' Us or 710 Toys 'R' Us stores across the United States also can opt to make them available online.

The new store also offers customers information from third-party experts, editors from the co-branded store, and other new and expecting parents. These include "Your Pregnancy, Your Baby and You," -- a free, opt-in e-mail series that sends parents personalized e-mails from the editors at Parenting.com that include advice and information for every stage of pregnancy and the baby's first year; and Buying Guides, which provide detailed product information to help customers learn about the features, accessories and prices of products such as strollers, car seats and breast pumps.

Separately, Bezos told investors gathered at the company's shareholders meeting Wednesday that the company is developing a program called "web reserve" to allow customers to order merchandise online and then pick it up in stores. He gave no timetable for its launch.

Bezos also said he is considering increasing the size of Amazon's board of directors.

Currently, the board is made up of just five members, including Bezos, venture investors John Doerr and Tom Alberg, former Microsoft executive Patty Stonesifer, and former Intuit CEO Scott Cook. Some corporate governance experts have criticized the board as clubby and too small.

"It would make sense to add one or two additional board members.. to increase even further [our] operational expertise," Bezos said Wednesday.

Shares of Amazon.com (AMZN: down $0.40 to $15.85, Research, Estimates) were down more than 3 percent in afternoon Nasdaq trade Wednesday. At the same time, shares of Toys 'R' Us (TOY: down $0.66 to $28.82, Research, Estimates) were about 2 percent lower on the New York Stock Exchange.