What does Toys R Us struggle signal for single store toy retailers?

With one of the UK’s best loved toy shops, Toys R Us, being the latest to fall victim to administration, the world of toy retailing may be in the midst of a seismic shift.

When the retailer first landed in the UK from its headquarters in the US in the late 80s and early 90s, it offered a promised land of ‘toys in their millions’ like no other had done before, with product stacked sky high on floor to ceiling shelves. It brought something new to toy retail at the time.

Yet, 30 years down the line, and Toys R Us has fallen into the hands of creditors, become hamstrung by bad debt to the tune of $5bn which in turn hampered its ability to evolve with the change in consumer habits.

While the events of February 28 left some 3,200 Toys R Us workers uncertain of what future they had with the company as it began administration proceedings, on a much wider level, it raised the question, what happens to toy retail now? What do consumers want, if not that ‘magical place’ that once was Toys R Us?

“I expect that the face of toy retailing will be changing over the next ten years,” Miles Penhallow, head of toys and children’s gifts at Play Room, the toy division of Associated Independent Stores, tells ToyNews.

“So many toy purchases are made on impulse. I believe that single store independent retailers in the high street will find retailing even more challenging as the full effect of internet sales is felt.”

The rise of the likes of Amazon and eBay has been the constant headache to the independent toy retailer, with fewer overheads to manage meaning less pressure on margin to be made, meaning lower prices. Add to this, the convenience that platforms like Amazon offer and the advent of same day home delivery, and it really is no surprise that online shopping has become the juggernaut that it is.

However, the independent can fight back, and will, according to Penhallow, who believes that the high street retailer’s best weapon in the fight for prosperity is in diversification.

“The high street will always attract shoppers and I believe that our department stores are best placed to prosper due to the variety of products that they can offer in their stores,” he continues.

“Our members are continually investing in their fixtures and fittings and work hard at being at the centre of their local communities. Our more prestigious stores such as Jarrold & Sons in Norwich and W J Daniel & Co in Windsor have used their unique histories to create a brand in which discerning consumers want to feel part of.”

Alongside the department stores, Penhallow sees a future in the growing popularity of alternative toy sellers, such as visitor attractions and garden centres and is actively encouraging such retailers to join the AIS organisation.

The Indie scene

In the wake of the Toys R Us administration announcement, many of the UK’s independent toy retailers have offered messages of compassion to the workers whose jobs now hang precariously in the balance.

At the same time, the consensus appears to be that while a blow to the industry, the eventuality was not unforeseen.

I think it is terribly sad. It is immediately sad for all of the Toys R Us staff who will lose jobs and for all the suppliers and support companies who will be adversely affected by the closure of such a huge company,” Wendy Hamilton of the independent toy retailer, Grasshopper Toys, tells ToyNews.

“But it was also probably inevitable. TRU didn’t respond to changes in consumer buying behaviours and as a behemoth, by the time they’d taken notice it was simply too late to react.”

Highlighted as the indie retailer’s secret weapon against the conglomerates, the ability to adapt quickly to consumer behaviours is what keeps many indies afloat, while major retailers with masses of shareholders and board members to answer, cannot.

“Being an independent is all about being different and ensuring that you are responding to your customers and surprising them by finding new and exciting things to sell them,” says Peter Allison of Whirligig Toys.

“Toys R Us seemed to rely on their status and perhaps forgot about the overall need to delight children.

“Sad to see them go,” he continues. “But the strength of the indie is continuing to grow.”

About Robert Hutchins

Robert Hutchins is the editor of Licensing.biz and ToyNews. Hutchins has worked his way up from Staff Writer to the position of Editor across the two titles, having spent almost eight years with both ToyNews and Licensing.biz, and what now seems like a lifetime surrounded by toys. You can contact him by emailing robert.hutchins@biz-media.co.uk or calling him on 0203 143 8780 You can even follow him on Twitter @RobGHutchins if ranting is your thing...

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