Toys R Us has another new owner, WHP Global, which plans to open new U.S. stores. The brand management company announced it took a controlling interest in Toys R Us' parent company, Tru Kids, which has already tried to revive the brand through pop-up stores to little success. The original Toys R Us stores have been closed in the U.S. since 2018 after a disastrous 2017 holiday season made it impossible for it to emerge from bankruptcy.
"We're in the brand business, and Toys R Us is the single most credible, trusted, and beloved toy brand in the world," WHP Global CEO Yehuda Shmidman told CNBC on Monday. "We're coming off a year where toys are just on fire... And for Toys R Us, the U.S. is really a blank canvas." WHP will manage Tru Kids' global business and will oversee its expansion. There are still over 900 branded Toys R Us and Babies R Us stores in 25 counties across the world, but WHP hopes to bring Toys R Us stores back to North America by the start of the 2021 holiday season. The company has not said how many Toys R Us stores it hopes to open.
"There are so many malls that will no longer be in the future, so we don't need to be there," Schmidman told CNBC. "But we could be in malls that do have traffic. ... So we really have an opportunity not just to capture that experience for toys that people are yearning for, but also capture where [people] want to shop. That will be very interesting post-Covid."
Tru Kids is backed by Solus Alternative Asset Management and its funds are managed by Ares Management. The company bought Toys R Us, Babies R Us, and its other intellectual properties after Toys R Us filed for Chapter 11 bankruptcy protection in 2017. Toys R Us could not recover from poor revenue during the 2017 holiday season and it was pushed into liquidation. All original U.S. Toys R Us stores closed in 2018.
Since then, the brand name has popped up in efforts to keep it alive. In October 2018, its lenders partnered with Kroger to bring Geoffrey's Toy Box stores as pop-up sections in the grocery stores. Tru Kids opened just two pop-up Toys R Us locations in malls in partnership with tech firm b8ta, but those closed in January when the coronavirus pandemic led to deceased mall traffic. At one point, Target was running the Toys R Us website, but now purchases on ToysRUs.com are competed through Amazon.
Shmidman, who joined Tru Kids as vice-chair in 2019, told CNBC the new stores could come in different formats. That includes the pop-up stores previously attempted, as well as flagship stores, airport locations, or mini-stores inside other retailers. The financial terms of Monday's deal were not revealed.