American toy giant Toys R Us has come under new ownership that intends to expand the long-struggling brand’s reach across North America. The children’s toy firm enjoyed a period of ubiquity until 2017, when the firm declared insolvency in America, rapidly followed by filing bankruptcy world-wide.
The firm has since been a mostly online enterprise worldwide, but that seems set to change following Toys R Us’ acquisition by management company WHP Global. The company did not entirely dissolve during its period of insolvency, with WHP Global stating the brand controls “over 900 branded stores and ecommerce sites across 25 countries.”
WHP Global seek to allay Toys R Us’ long term woes, which have seen the toy store all-but-absent in America since 2018. While there has been an unsuccessful attempt at reviving Toys R Us in the United States, the two stores were forced to close attributing to poor foot traffic and the initial impact from COVID-19.
The focus will be on smaller scale showings such as airport shops and smaller vendors embedded in larger department stores. This is opposed to Toys R Us’ trademark mega-stores, a business model that proved non-viable year round, only really effective around the holiday season. Despite a long period of success prior to the millennium, the company saw declining returns with the rise of online stores. Competitors such as GameStop have had to consider changing its approach to avoid falling into similar pitfalls that Toys R Us faced.
Toys R Us also sold video games as part of its repertoire, a side of the business that saw shrinking returns with the rise of digital storefronts for both PC and console. PlayStation recently posted record digital sales, suggesting that WHP Global will not be focusing on trying to disrupt a massive and still-growing online market. Additionally, no mention of the gaming market was mentioned in WHP Global’s statement, so it’s likely that a large chunk of Toys R Us’ videogame side will be eschewed as part of the company’s planned downscaling.
While market analysis suggests the toys market is currently experiencing a surge in demand, it will take careful management by WHP Global to push Toys R Us back into the limelight, lest history repeat itself again. Despite this uphill struggle, Toys R Us have kept an international (and online) presence despite similar closures worldwide with a similar approach, with smaller-scale and franchised stores already providing a more sustainable approach for the company.
All U.S. Toys R Us stores closed in 2018, though a series of bankruptcy protection claims did manage to stop the brand from going under entirely internationally. WHP Global will have to do what their predecessors- TRU Kids- could not, and start making a way forward for the company as the world slowly begins to move past the 2020 pandemic.
Source: PR Newswire
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