Toys R Us Reopens

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Alpha8472
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Toys R Us Reopens

Post by Alpha8472 »

The new owners have opened up a new Toys R Us store at the entertainment and retail center called American Dream in East Rutherford, New Jersey. It is a global flagship and features 10,000 items. There is a cafe and ice cream parlor along with a 2 story slide. The new company plans to open 400 stores inside of Macy's stores in 2022.

I visited the last brand new Toys R Us store in Concord, California when it opened up just months before the chain closed. That store was huge, and I was impressed with the selection and design. I had high hopes that the company would build more of these flagship stores. Perhaps this new flagship store will bring back the nostalgic memories of an entire store devoted to toys and fun.

https://chainstoreage.com/csa-first-loo ... ican-dream
ClownLoach
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Re: Toys R Us Reopens

Post by ClownLoach »

This doesn't look as fancy as the two mall stores the last ownership group tried to relaunch with. Those looked like the size of a Lego store with incredibly expensive custom fixtures, flooring and lighting but a very small amount of product so not surprisingly they failed. This looks like it moved into an existing mall space that had some walls, and otherwise is using more economical graphics and fixtures. In other words - they built something that could probably be duplicated elsewhere in a true national rollout of new stores in existing whitespace. And they're sized similarly to the office supply stores which are vanishing rapidly. If they bought all the intellectual property and know where TRU's most profitable stores were they could open a smaller, more manageable chain of a couple hundred units or so and make a fortune. TRU is still doing well in many countries around the world, including lots of big barns just over the border in Canada.

I'm not so sure the Macy's piece will work, but it's low risk, high reward if it does. Macy's is stuck with the real estate anyway. It's strange that although Ron Johnson did a lot of wrong with JCPenney (mainly the pricing and promotion model) - he was 100% correct about the impending collapse of the department store industry. He said that the department stores needed to sign on big brands to make their own boutiques and stores-within-a-store as the customer shifts to more direct interaction with the brands they like. He couldn't have been more right on that one - I wonder how it would have worked out if he had signed up for running Macy's instead of JCPenney... Since Macy's is moving in the direction JCP was trying to a decade ago (minus moving to a EDLP price model which doesn't work in that industry).

The only real reason Toys R Us is gone here is that they sold the US division to private equity vultures that bled the company of profit while burying them in debt service. This model keeps repeating itself - moderately successful big box in need of some capital expenditures for updates sells to private equity to fund the work. Private equity firm cancels needed work, slashes payroll and expenses to the bone, implements anti-customer policies like limited return policies that upset the customer, raises prices, and dumps their debt into the business. Company limps along barely making ends meet, and then winds up in bankruptcy if the slightest speed bump comes up.
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Re: Toys R Us Reopens

Post by veteran+ »

Oh man, that last paragraph!!!

Spot on!
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