Competition from stores like Walmart and Amazon were one factor in Toys R Us’s demise, but massive debt also played a role. Kids are also less interested in traditional toys than they once were, with older kids drawn more to gadgets and electronics.
But there are signs that Toys R Us could return. While the country’s biggest toy retailer is gone from the mall, a Toys R Us comeback is in the works.
The return of Toys R Us?
Toys R Us liquidated all 800 of its stores earlier in 2018 and shut down its online retail operations. The only thing that remained was to auction off the company’s remaining assets. Those include the Toys R Us and Babies R Us brand names and the company’s websites. It also includes the chain’s famous mascot, Geoffrey the Giraffe.
But in early October, the owners of those assets – a group of the chain’s secured lenders – decided it made more sense to bring the Toys R Us brand back to life rather than sell it off. The new company will own the rights to the Toys R Us name across most of the world. It will also own several toy brands, such as Imaginarium and Koala Baby.
“[T]he new owners are actively working with potential partners to develop ideas for new Toys R Us and Babies R Us stores in the United States and abroad that could bring back these iconic brands in a new and re-imagined way,” the group said in a press release.
Don’t expect your local Toys R Us to reopen
Toys R Us might come back to life, but it won’t be the store you remember. A revived Toys R Us will probably look a bit different than the big box stores shoppers are used to, marketing expert Joseph Anthony told Good Housekeeping. Instead, the focus will probably be on online retail.
“I suspect that [their strategy] will be a multi-faceted model that will put a heavy emphasis on e-commerce, with brick-and-mortar stores utilized as fulfillment centers, versus the huge footprints that we were used to seeing in the past,” Anthony said.
Introducing Geoffrey’s Toy Box
Geoffrey LLC, the holding company that owns the Toys R Us assets, also recently announced plans for a store-within-a-store concept. The shops will open in time for the 2018 holiday season.
Geoffrey’s Toy Box will be a partnership with a yet-to-be-announced Midwest retailer. The in-store shops, which will debut in November, will feature branded Geoffrey’s Toy Box displays, according to industry publication The Toy Book.
Severance payments for laid-off workers
There’s also good news for the 33,000 Toys R Us employees who lost their jobs when the chain collapsed. The company’s executives received millions in bonuses even as the company was in the midst of going out of business. But regular workers got nothing when their jobs disappeared. Before the bankruptcy, the company guaranteed that workers would receive two weeks of severance pay for their first year on the job, plus one week of pay for each additional year.
Outraged workers made their feelings known about the situation. In response, two of the companies that were behind a 2005 leveraged buyout that saddled the company with billions in debt said they’d set up a fund for the displaced workers. The companies have set aside $20 million for workers, though it’s not clear how they’ll distribute the money. It’s just a fraction of the $75 million that advocates say Toys R Us owes its former employees.
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