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Toys ‘R’ Us May Get A Second Chance As A Store-Within-A-Store Concept

The biggest lenders of Toys ‘R’ Us have decided to cancel the bankruptcy auction for the retailer’s name and other intellectual property assets, and may instead resurrect the brand, according to USA Today. The revival could include creating a store-within-a-store at a large Midwestern retailer called Geoffrey’s Toy Box.

The pop-up concept could benefit both Toys ‘R’ Us and its potential partners, according to Deb Gabor, CEO of Sol Marketing. A department store in particular would make a good target, as the presence of the famous toy brand would create a convenient destination for one-stop shopping.

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“A store-within-a-store strategy leverages Toys ‘R’ Us’ unique experience, category knowledge and brand equity to create mutual success for retailers, toy manufacturers, consumers and the Toys ‘R’ Us brand itself,” said Gabor in an interview with Retail TouchPoints. “For instance, think about a struggling department store: it could bring in its own on-site Toys ‘R’ Us store. The department store could stand to benefit financially from Toys ‘R’ Us in multiple ways: defraying rent costs, bringing in new shoppers, increasing their value to current shoppers and reducing risk in introducing a new category.”

Toys ‘R’ us also will seek to expand its international presence and develop a private label business, according to a court filing. However, any revival effort will face competition from retail giants that have been boosting their own toy selections:

  • Walmart is expanding its collection of toys by 30% in-store and 40% online;
  • Target is increasing its overall toy selection by 2,500 products in time for the holidays; and
  • Amazon is extending sales of its best-selling toys into the physical world at its Amazon 4-star store in New York City.

Retailers not traditionally known for their toys also are filling the gap left by the initial demise of Toys ‘R’ Us. Party City is launching 50 Toy City pop-ups alongside its Halloween City stores, which will operate throughout the holiday season, while Michaels is rebranding its children’s selection in-store and launching a dedicated site.

Toys ‘R’ Us isn’t the only classic retailer getting a second chance: FAO Schwarz is set to reopen in Rockefeller Center in November 2018. The updated toy store will put an emphasis on the customer experience, including product demonstrators, magicians and employees dressed as characters.

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