Last year, the toy industry woke up in a world without Toys R Us.
Founded in 1957 by Charles Lazarus, the onetime thousand-pound gorilla of toy retailing filed for Chapter 11 bankruptcy protection in September 2017, the victim of discount chains like Walmart Inc. and online retailers like Amazon.com Inc. Before the Wayne, N.J.-based chain's 735 stores shuttered in June 2018, everything-must-go discounts led to a sugar rush of sales that fell sharply in the Toys R Us-free first six months of this year.
This year, "the ghost of Toys R Us is still around," said industry observer Richard Gottlieb of New York's Global Toy Experts.
Toymakers are still coming to grips with a landscape stripped of one of their chief channels, while retailers are figuring out how to capture the fallen giant's onetime customers, Gottlieb said.
The bankruptcy accelerated a shift to data-driven toy sales, said CEO Jim Miller of Kent, Ohio-based toymaker Simplay3 Co., as many longtime Toys R Us buyers, who had built up industry contacts over years, lost their jobs.
Nowadays, retailers want to see strong sales online before they will stock product in brick-and-mortar stores, Miller said.
In January, Toys R Us executives launched Tru Kids and took ownership of the Toys R Us, Babies R Us and longtime Toys R Us mascot Geoffrey the Giraffe brands. Toys R Us stores have been reborn — sort of — with ticketed "Toys R Us Adventures" in Chicago and Atlanta and experience-driven stores that opened last month at The Galleria in Houston and Garden State Plaza in Paramus, N.J. The revamped toysrus.com website sends customers to target.com for purchases.
Meanwhile, Toys R Us Canada, unaffected by the U.S. company's woes, continues to operate 83 stores. Last month, the Toronto-based company, owned by Fairfax Financial Holdings Ltd., launched a new website and e-commerce platform.
Toys R Us' longtime competitors are pushing exactly the sorts of marketing ventures the fallen giant was slow to embrace.
This fall, Bentonville, Ark.-based Walmart rolled out WalmartToyLab.com, an online interactive experience built in collaboration with New York/Tel Aviv interactive video firm eko.
"Being a retailer isn't simply about selling items anymore — it's about creating an experience for our customers," Walmart Vice President of Toys Anne Marie Kehoe said in a statement.
In October, Disney and Target launched Disney stores in 25 Target stores, with 40 more slated to launch next year. Target has also enhanced its apps with "Disney shops at Target" functionality.
