No Toying Around: Toys R Us Stores Could Be Coming Back To North America

One of the most well-known retail brands suffered a Chapter 11 bankruptcy in 2017 that it couldn't overcome. Toys R Us went bankrupt and closed its stores in North America.

But the toy retailer could be making a comeback in 2021.

What Happened: WHP Global is taking a controlling interest in Tru Kids, the parent company of the Toys R Us and Babies R Us brands. Tru Kids bought the brands and the intellectual property of the bankrupt retailer previously.

The company plans on opening a number of Toys R Us stores in the United States, potentially ahead of the 2021 holiday season.

"We're in the brand business, and Toys ‘R’ Us is the single most credible, trusted and beloved toy brand in the world,” WHP Chairman Yehuda Shmidman said, calling the opportunity for Toys R Us a blank canvas.

WHP Global will guide the expansion of the Toys R Us brand in the U.S. and didn't share a store count goal. The company mentioned flagship stores, pop-ups, airport stores and mini stores in existing retail stores as possibilities going forward.

There are over 900 Toys R Us stores in 25 international countries in Europe, Asia, Africa, Australia and the Middle East that generate over $2 billion in global retail sales.

Related Link: Stock Wars: A Tale Of Two Toy Stories: Hasbro Vs. Mattel

Why It’s Important: If Toys R Us can stage a comeback, it could be good news for pure-play toy companies like Hasbro Inc (NASDAQ: HAS) and Mattel Inc (NASDAQ: MAT).

“We are thrilled to be taking the reins of the world’s leading toy brand at a time when the category is up 16% and consumer demand for toys is at an all-time high,” Shmidman said.

Another stock to watch is (NASDAQ: AMZN). At press time, the online retailer is the company that's linked when customers go to the Toys R Us website to make a purchase. Amazon has benefitted from an increase in traffic and sales of toys in the absence of Toys R Us.

Target Corp (NYSE: TGT) previously powered the Toys R Us website.

A comeback isn't guaranteed for Toys R Us, especially in a world that's shifting to e-commerce. The toy retailer tried a number of strategies over the years including pop-up stores and using the e-commerce business to revive the brand.

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