Toys R Us in North America has been reborn a year after its collapse, but an announcement about its relaunch raises as many questions as it answers.
Ostensibly, the new company – Tru Kids Inc – is the global owner of the Toys R Us, Babies R Us, Geoffrey and another 20-odd registered brands. It will also run the US retail business, but says details on those plans will be released at a later date.
A statement announcing the new business trumpeted plans by Tru Kids’ global partners to open 70 new Toys R Us stores “this year in Asia, India and Europe and the development of new e-commerce platforms in several key markets”. However, the Toys R Us Asia business, 21-per-cent owned by Fung Retailing has already revealed its intention to open 70 new stores in Southeast Asia and China this year (India is not part of its territory). And it was unclear whether the partnerships are licensing arrangements or if Tru Kids has taken over shareholdings in regional businesses from creditors of the collapsed North American company. The balance of Toys R Us Asia is owned by Taj Noteholders representing a mixture of investment funds and financial institutions who had stakes in the failed US company.
Tru Kids will be led by Richard Barry, the former global chief merchandising officer at Toys R Us, who will serve as president and CEO. The leadership team includes Matthew Finigan as CFO, James Young as EVP of global license management and general counsel, and Jean-Daniel Gatignol as SVP of global sourcing and brands.
The company also appointed brand management veteran Yehuda Shmidman as vice chairman to advise on global strategy and execution. Shmidman is the CEO of Wave Hill Partners, and the former CEO of Sequential Brands Group.
Barry said in a statement that despite “unprecedented efforts to capture the US market share this past holiday season,” there remains a significant gap and huge consumer demand for the trusted experience that Toys R Us and Babies R Us delivers.
“We have a once-in-a-lifetime opportunity to write the next chapter of Toys R Us by launching a newly imagined omnichannel retail experience for our beloved brands here in the US. In addition, our strong global footprint is led by experienced and passionate operating teams that are 100-per-cent focused on growth.”
Fung Retailing and partner Toys (Labuan) Holding were listed among Tru Kids’ global partners, along with Al Futtaim Sons in the UAE, Lotte Shopping in South Korea and Tablez & Toyz in India.
“[Tru Kids] will work closely with each to expand the Toys R Us and Babies R Us businesses in their respective markets as well as actively seek opportunities to bring the brands to new and emerging territories,” the company said in a statement
Corinne Ruff of US-headquartered Retail Dive said the collapse of Toys R Us last year took a dramatic toll on the market. “After four straight years of growth, toy sales in the US dropped 2 per cent to US$21.6 billion last year, according to NPD Group, in part due to the retailer’s demise.”
She said that mass merchandisers like Walmart, Target and Amazon, as well as department store chains like Kohl’s and JC Penney, moved quickly to fill the void during the recent holiday period.
“As a result, toy sales at Amazon surged 30 per cent, and others felt a sales bump. But now that the most iconic toy retailer is back in business, will nostalgic customers come running back?”