Toys R Us, the on-again, off-again toy retailer, is looking for another reboot, less than four months after closing its remaining stores, according to investors that acquired its assets out of bankruptcy court.
A group of hedge funds that have taken control of the company – and decided to shutter its stores in June – said in a court filing they have canceled an auction of the rights to the brand names Toys R Us and Babies R Us, for which they had already received bids.
Meanwhile the new owners of the Toys R Us assets have rebranded the company as Geoffrey’s Toy Box for the relaunch. This has angered many of the 31,000 laid-off Toys R Us workers as the company is saying Geoffrey has just been on vacation. The company plans to open pop-up shops inside regional mass merchandise stores in time for the holidays, with plans down the road for its own locations.
In the filing the investors described plans for “a new, operating Toys R Us and Babies R Us branding company” that would “create new, domestic, retail operating businesses … as well as expand its international presence and further develop its private brands business.” Details, including plans for physical or digital channels or both, were not disclosed.
The investors further stated in the filing that selling off rights to the brands in the auction “were not reasonably likely to yield a superior alternative to the (relaunch plans)” for creditors as well as toy vendors and future employees.
Toys R Us in March announced plans to close or sell off its 800 remaining U.S. stores, hoping to keep at least 200 open. When a white knight didn’t materialize it closed all its doors in June, affecting 33,000 employees. Toys R Us filed for Chapter 11 bankruptcy protection in September 2017; shortly thereafter it launched an abortive online marketplace.
The company’s departure left “an $11 billion hole in the toy industry,” according to the Wall Street Journal as hundreds of vendors had no physical outlet for selling their products.
In addition to obviously Amazon – which has plans for a toy catalog this holiday season – other companies benefiting from the departure of Toys R Us include Walmart, Target, Five Below, Ollie’s Bargain Outlet, GameStop, Party City and Michaels, according to a June report from Credit Suisse.
Walmart and Target, for example, are adding more toy floor space this holiday season, while Amazon plans to distribute the catalogs at its Whole Food locations.
A new consumer spending survey from Stifel found that Amazon was the preferred toy shopping destination over Walmart, Costco and Target.