Should Toys“R”Us Be Toying With Flagships Again?

Six years after filing for bankruptcy, Toys“R”Us plans to open as many as 24 flagship stores in “prime locations” in the U.S. starting next year, along with shops in airports and cruise ships.

Once the world’s biggest toy store chain with over 1,400 stores at its peak in the ‘90s, Toys“R”Us filed for bankruptcy in 2017 and closed all U.S. stores in 2018.

WHP Global, which acquired controlling interest in Toys“R”Us in 2021, said the new effort is part of the chain’s “Air, Land and Sea” expansion strategy. Since acquiring the business, WHP Global in the U.S. opened one standalone, two-level store measuring 20,000 square feet in December 2021 at the American Dream mall in New Jersey, featuring a two-story slide and an ice cream parlor.

In 2022, 452 in-store Toys“R”Us shops measuring between 1,000 and 10,000 square feet opened inside Macy’s locations.

The flagship stores to open in 2024 will resemble the American Dream mall location and be situated to complement the Macy’s in-store shops. They’ll be operated by Go! Retail Group, which operates toy and game stores in malls across the U.S. under Go! Toys & Games and other banners, to take advantage of its existing logistics infrastructure.

Tapping into a strong recovery in air travel, the first airport store is scheduled to open in November at the Dallas Fort Worth International Airport and will be operated by travel retailer Duty Free Americas. Stores on cruise ships will sell toys and exclusive cruise-themed merchandise, “ensuring that the magic of Toys”R”Us is accessible to consumers wherever their adventures take them.”

In a statement, Yehuda Shmidman, chairman and CEO of WHP Global, said that since acquiring Toys”R”Us, it has increased its global retail footprint by more than 50%, with openings in the U.S., U.K., India, Dubai, and Mexico. He said, “We now have over 1,400 stores and e-commerce sites across 31 countries, and as we head into 2024, we are excited to bring Toys”R”Us to consumers everywhere, whether you’re visiting one of our stores at Macy’s, at our flagships, in an airport, or onboard a cruise ship.”

Toys“R”Us will continue to be challenged on prices against competitors like Amazon, Target, and Walmart. The three often use toys as loss leaders over the holiday selling season.

Lars Perner, an assistant professor of clinical marketing at the University of Southern California Marshall School of Business, believes Toys“R”Us could initially benefit from nostalgia.

“I think it could work as a kind of a novelty in the short-run,” he told the New York Times. “I’d be hard-pressed to see this being successful in the long run.”