Nearly a year after liquidating its assets and closing 800 U.S. stores and its e-Commerce site, Toys ‘R’ Us appears to be making a comeback just in time for the 2019 holiday season. Under the leadership of Tru Kids Brands, Toys ‘R’ Us will open six smaller-format stores in the U.S. and an e-Commerce site later this year, according to Bloomberg.
The stores will be approximately 10,000 square feet, roughly one-third to one-half the size of the chain’s previous footprints. The stores will be more focused on experiential shopping, including play areas, the report said. Toys ‘R’ Us first introduced the “Play Labs” concept after filing for Chapter 11 bankruptcy in September 2017 as a way to encourage families to come in and join their kids to “test” the toys before actually making a purchase.
“We have to talk about who our customer is, and our customer is four feet and under,” said Chuck Luckenbill, Principal at Luckenbill Retail Solutions and former VP, Store Planning and Design at Toys ‘R’ Us in an interview with Retail TouchPoints. “We can talk about grandmas and aunts and uncles, moms and dads — the relatives buying toys for the kids — but if they buy a toy the kid doesn’t like and they never play with it, there’s a good chance they’re never coming back to the store again.”
Tru Kids is spearheaded by a group of former Toys ‘R’ Us executives, including former Global CMO Richard Barry, who now leads the company as President and CEO. Upon the formation of Tru Kids, the company first revived Toys ‘R’ Us in the U.S. during the 2018 holiday season through a store-within-a-store partnership with Kroger called Geoffrey’s Toybox. The shops opened in 600 supermarkets during the peak season, offering a selection of 35 exclusive toys.
The new store openings on the horizon come at a time when retailers have scrambled to fill the toy sales gap Toys ‘R’ Us left in the first place. Walmart, Target, Amazon, Party City, BJ’s Wholesale Club and Michaels are among retail businesses that either expanded their overall toy collections ahead of the holiday season or increased an emphasis on toy sales.
And after making its return to New York City in the 2018 holiday season with a new flagship store, FAO Schwarz is opening more shops in airport terminals, already having opened locations in LaGuardia Airport and Chicago Midway International Airport.
But while all these companies have filled the toy store gap in some way, 2018 toy sales still dropped 2% due to less overall shelf space, according to NPD Group.
MGA Entertainment, one of the world’s largest toy manufacturers, already has committed to selling inventory to the new Toys ‘R’ Us stores, the report said. MGA CEO Isaac Larian attempted to buy Toys ‘R’ Us’s U.S. and Canadian operations in an $890 million auction bid in April 2018, but the retailer’s legal representatives shot the bid down.