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Toys R Us was sold again – the latest effort to revive the famous but struggling brand amid a boom in toy sales.
The once powerful retailer who filed for bankruptcy in 2017 amid mounting debt is now owned by WHP Global, the brand licensing company that owns Ann Klein and Joseph Abboud.
WHP Global acquired a majority stake in Tru Kids, which owns Toys R Us and Babies R Us, the company said on Monday. The financial terms of the deal were not disclosed.
TOYS R US RETRENCHING AGAIN, OPEN YOUR LAST 2 US STORES
“We are excited to take the reins of the world’s leading toy brand at a time when the category has grown 16 percent and consumer demand for toys is on the rise,” said WHP Chief Executive Yehuda Shmidman in a statement. . “This is a natural fit for WHP, as we can leverage our global network and digital platform to help grow Toys R Us and Babies R Us around the world.”
Shmidman told CNBC that he plans to grow the 70-year-old retailer founded by Charles Lazarus and made famous by his mascot, Geoffrey the Giraffe, by opening physical stores again.
Toys R Us was sold again – the latest effort to revive the famous but struggling brand amid a boom in toy sales. (Photo by Tim Boyle / Getty Images)
But the obstacles to doing so are greater than ever because the gap left by Toys R Us – which was once the biggest toy seller in the country – has been filled by major retailers like Walmart and Target, as well as by e-commerce giant Amazon.
“Toys R Us is one of the biggest brands in the world,” said Gerald Storch, who was once the company’s chief executive. “But the challenge is that the market share is already divided between Amazon, Walmart and Target.”
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Shmidman, who previously tried to buy the bankruptcy brand, according to sources, has been vice president of Tru Kids since 2019. His company is backed by a $ 350 million capital commitment from funds backed by Oaktree Capital Management and BlackRock .
The Toys R Us and Babies R Us brands were bought by private equity investors Solus Alternative Asset Management and Ares Management, which hoped to revive the chain by opening smaller stores across the country before the plan was put aside by the pandemic.
Two stores in New Jersey and Texas, opened in 2020, were quietly closed in 2021.
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The vast majority of Tru Kids’ revenues are derived from overseas licensing fees, where Toys R Us and Babies R Us generate more than $ 2 billion in sales from nearly 900 stores and e-commerce sites in Canada, Asia, Africa and Middle East, according to WHP.