5 Things to Know about to Comeback of Toys R Us

Toys R Us is back - and, apparently better than ever.

Following their downwards spiral within the retail market, the re-emergence of Toys R Us on the scene has caught the attention of the CRE industry. It seems like everyone has questions about what exactly is going on here.

What does the comeback of Toys R Us mean for retail - and respectively, for commercial real estate? This blog post will analyze the situation to provide a comprehensive briefing on the new era of Toys R Us.

Here’s what all CRE pros need to know about their come back and their newly opened stores:

A Lot Can Happen in Two Years

Toys R Us knows this is true. After more than 50 years of success in the toy market, in 2017 the international giant officially filed for bankruptcy. The company couldn’t support the loads of debt that accumulated throughout retail’s turbulent decade - reportedly, most of which was accumulated from a brand leveraging buyout in 2005.

When they filed for Chapter 11 bankruptcy in 2017, the records weighed a debt of $7.9 billion against assets of $6.6 billion. All stores in the United States were closed and it seemed like that was the end - but the nation shouldn’t have cut Toys R Us out so quickly.

As stated above, a lot can happen in two years.

2019 rolled around and Toys R Us made a revival on the US brick-and-mortar market - and they’ve adopted a completely new approach to merrymaking.

Rewriting the Script with Experiential Retail

Toys R Us is harnessing retail’s biggest trend - experiential storefronts. The company is focusing on providing fun and interactive activities for both children and parents in the new round of US mall locations.

The new stores might be smaller but they’re packed with the coolest toy selection on the market and tons of room to play. It’s a kid’s paradise!

5 Main Takeaways

So what can CRE pros learn from all of this?

For one, brick and mortar retail is far from dead. It’s a thriving industry that, when harnessed correctly, can achieve feats that contemporary e-commerce could never deliver.

Second, honing in on experience is one of the strongest strategies that is leveraging physical retail’s revival. The power of experiential retail shouldn’t be ignored into 2020 and beyond.

Big isn’t always better, especially in today’s retail arena. When the online marketplace brings products to the people, physical stores can become social destinations for fun and excitement.

In today’s retail market, brands can do better by having a few stores in key cities with less square feet than by having sprawling locations in suburban areas.

Finally, not all brands that fall off the market won’t come back in one form or another. Staying afloat amidst today’s changing tides of retail may require some time to reconfigure a brand’s business approach. Industry pros should keep an eye on everyone - especially the quiet ones.

There’s a lot to be learned from Toys R Us. Use these insights to stay ahead in CRE’s retail sector.