Toys R Us Will Be Back Before You Know It
The days are numbered for Toys R Us stores here in the U.S. Earlier this month, the company announced it would shutter all U.S. stores, and it was in the process of trying to find a buyer to take on its Canadian-based locations. All of this came after years of lagging sales and a failed attempt at restructuring the company’s debt.
The day Toys R Us officially closes its doors later this month will be a monumental—and sad—one without a doubt. But it likely won’t be the last that we’ve heard from the brand.
If we’ve learned anything during the past year or so of covering consumer electronics retail, it’s to expect the unexpected. Take, for example, hhgregg. Little did we know at the time that when the company filed for bankruptcy and ultimately closed up shop early last year that it would be back up and running a handful of months later, albeit under new ownership.
The same goes for Circuit City. Though it went out of business back in 2009, the Circuit City brand lives on. At CES 2018 earlier this year, new owner/CEO Ronny Shmoel held a press conference to announce the company’s official return. He even went so far as to talk about their plans to bring the company back into the physical retail space at some point in the distant future. There have been a couple of snafus in the process—including missing their target website launch day—but the fact is, the name lives on.
In both of these instances, investors were actively engaged in scooping up the rights to the brand names, assets, customer lists, and more through auctions. Shmoel and Michael Eisner, Principal of Valor LLC, which owns the hhgregg name, acquired their brands for dirt cheap compared to the valuations of those companies in their heyday, and both are hoping to be able to capitalize on new business strategies while borrowing their brand recognition and playing into the nostalgia around those names.
“Whenever you hear about companies that are having financial issues and that have such a stellar reputation and been in business for so long … you don't have many companies that have that type of reputation and history,” Eisner said in an interview with Dealerscope back in November. “That was one of, and to me probably the main, most attractive pieces of hhgregg, and that's why we pursued it so heavily.”
And it’s for that same reason that Toys R Us will likely be the next big-name brand to resurface in some form after it closes its doors in May.
Some investor—or maybe even some established toy retailer looking to quickly expand their footprint—will swoop in and acquire the rights to the Toys R Us name, Geoffrey the Giraffe, all of those old jingles, and, most importantly, the data that the company has collected over the past half century. And though it may resemble a shell of its former self, take comfort in knowing that the company behind the eventual winning bid will likely have a much better strategy in place than whatever the current management team was trying to do. Otherwise, Toys R Us wouldn’t be in this position in the first place.
One name in particular to keep an eye on might be Strategic Marks—a company known for buying and revitalizing defunct brands. They currently own the KB Toys name, and it’s already been reported that they plan to open up 1,000 KB Toys pop up shops for the 2018 Black Friday and holiday shopping season.