New Toys “R” Us store opens at Garden State Plaza in Paramus, New Jersey.
Source: Brand Tru Kids
Toys R Us closed the only two stores left in the United States.
The iconic toy retailer made the decision as a result of the difficulties brought about by the Covid pandemic and plans to direct resources towards opening new locations where there is better buyer traffic, a spokesman told CNBC in an e-mailed statement.
“Consumer demand in the toy category and Toys R Us remains strong and we will continue to invest in the channels where the customer wants to experience our brand,” said the person.
Toy sales in the United States increased 16% last year, to $ 25.1 billion, market researcher The NPD Group reported on Monday, when families turned to toys to keep children busy during the health crisis. But a substantial portion of those sales have moved online.
Tru Kids, an entity that acquired the intellectual property of Toys R Us during its sale in 2018, opened two smaller-format stores in late 2019: one at the Garden State Plaza Unibail-Rodamco-Westfield mall in Paramus, New Jersey, and a second at The Galleria at Simon Property Group in Houston. The Houston location closed on January 15, the spokesman said, while the Paramus location closed on Tuesday.
Representatives from URW and Simon did not immediately respond to CNBC’s requests for comment.
Tru Kids is still running the Toys R Us website, which ultimately sends customers to Amazon to complete a purchase after the toys are marketed. It also continues to license the brand globally.
Many consumers avoided physical stores during the pandemic and instead started to buy more online. Mall-based retailers suffered exceptionally. It will probably take some time for customers to adjust to returning to shopping malls, and a retail research firm is forecasting that there may be up to 10,000 store closings announced by retailers in the United States this year, which would set a new record.
Bloomberg first reported on the closure of Toys R Us on Friday.