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NEW YORK SUES TOYS R US

New York filed a lawsuit Thursday against Toys R Us and four major toy manufacturers, charging that the toy retailer bullied its suppliers into denying popular toys and games to discount warehouse clubs.

The complaint, filed in Brooklyn federal court, contends Paramus, N.J.-based Toys R Us pressured toy suppliers to not sell their most popular products to the retailer's chief competitors, outlets such as Price/Costco and Sam's Club.

"These low-margin retailers were underselling Toys R Us, which feared a loss of business from comparison-shopping consumers and damage to its carefully cultivated 'everyday low-price image,' " state Attorney General Dennis Vacco said.

The state also named toy companies Mattel, Hasbro, Tyco Industries and Little Tikes Co. as defendants, claiming Toys R Us brokered an illegal agreement among the manufacturers. That deal ensured that warehouse outlets could obtain specific popular toys only in "combination packs" which cost consumers more, Vacco said.

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