Plans for a Toys R Us comeback in the US have hit a roadblock as the retailer shut the doors of its only two physical stores, citing the impact of the coronavirus for the drop off in footfall.
Owned by Tru Kids Inc which bought to the toy retailer in 2018 following its liquidation in late 2017, confirmed the closure of the two locations in New Jersey and Texas. The shops were launched as part of a comeback plan for the Toys R Us name.
With the locations now permanently shut, Tru Kids will continue to sell online.
“As a result of Covid-19, we made the strategic decision to pivot our store strategy to new locations and platforms that have better traffic,” said Tru Kids in a statement. “Consumer demand in the toy category and for Toys “R” Us remains strong, and we will continue to invest in the channels where the customer wants to experience our brand.”
The news comes amid a surge in consumer demand for toys across the US, fuelling the sector to a 16 per cent growth to $25.1 billion in 2020. The pandemic’s lockdowns have seen disposable income redirected to the toy market as parents look for products to keep children engaged throughout school closures and social restrictions.
However, the majority of that spend has been generated through online shopping and home delivery services that have witnessed a vast uptick due to the stay at home messaging of the pandemic.
Tru Kids’recently closed stores at the Houston Galleria mall and at the Westfield Garden State Plaza mall in Paramus had been open for little more than a year before they were shuttered on January 15 and 26.
The statement from Tru Kids suggests that Toys R Us could make an attempt to relaunch its physical retail presence at new locations. Before its 2017 bankruptcy, most of its massive stores had been freestanding locations where parents could let their children play with the floor sample displays.
At its peak in the 1990s, Toys R Us had 1,400 stores, controlling 25 per cent of the global toy market. It was listed as the 22nd largest private company in 2017 with $11.5 billion in sales, according to Forbes.
The New York Post writes that owned by a group of investors who bought the trademark out of bankruptcy, Tru Kids had plans to open 10,000-square-foot stores – or about a third of the size of their former spaces.
Toys R Us still has stores in Asia, Europe and Canada under licensing deals with Tru Kids.