Toys “R” Us is making a comeback—with a new look and direction.
The retailer, which filed for bankruptcy and shuttered stores after facing declining sales and increasing debt, is looking to breathe life back into its business. However, Geoffrey the Giraffe will be one of the few items that will carry over into the company’s new brand.
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The Wall Street Journal reports that Toys R Us’ controlling lenders “intend to revive the business behind the Toys ‘R’ Us and Babies ‘R’ Us brand names.” The goal is to “create new, domestic, retail operating businesses” while maintaining its licensing of certain products worldwide, according to court documents filed Monday, as reported by the Journal. The company’s lenders decided to reverse the order after speaking to controlling parties and deciding the brand was too valuable to give up.
Toys “R” Us had planned to auction off the rights to its name and the Babies “R” Us brand. Bidders had already made offers for them, according to the filing. But the company’s owners decided to cancel the auction.
Toys “R” Us filed for Chapter 11 bankruptcy protection in September last year, hoping to restructure some $5 billion in debt, much of which stemmed from a $6.6 billion leveraged buyout by private equity firms in 2005.
But the company changed course in March, saying it would sell its operations in Canada, Asia and Europe, and shut down in the United States.
Though some have speculated about Toys “R” Us coming back in some form, the company’s revival will take a different form aimed at wholesale vendors.
The lenders who own a key piece of the old Toys R Us have revealed that they are keeping the corporate brand names and intellectual properties, including Geoffrey, the brand’s giraffe mascot, and are dipping their toes back in the toy business with a wholesale venture called Geoffrey’s Toy Box.
That new venture, for the time being, is being operated out of the Toys R Us headquarters building in Wayne, New Jersey, where a small number of former Toys R Us executives and employees continue to report to work.
In a press release, Geoffrey, LLC—Toys “R” Us’ intellectual property holding company—wrote:
Geoffrey, LLC, as reorganized, will control a portfolio of intellectual property that includes trademarks, ecommerce assets and data associated with the Toys “R” Us and Babies “R” Us businesses in the United States and all over the world, including a portfolio of over 20 well-known toy and baby brands such as Imaginarium, Koala Baby, Fastlane and Journey Girls. The reorganized company will own rights to the Toys “R” Us and Babies “R” Us brands in all markets globally, with the exception of Canada. It will also become the licensor of the brands to the company’s existing network of franchisees operating in countries across Asia, Europe and the Middle East, and in South Africa.
In addition to continuing to service these markets, the new owners are actively working with potential partners to develop ideas for new Toys “R” Us and Babies “R” Us stores in the United States and abroad that could bring back these iconic brands in a new and re-imagined way. Geoffrey LLC will provide additional detail on this front as it becomes available.
On Tuesday, Geoffrey’s Toy Box launched branding and PR efforts at the Fall Toy Preview in Dallas.
USA Today reported:
James Zahn, a toy reviewer and publisher of The Rock Father magazine reported Tuesday that a Geoffrey costumed mascot was roaming the aisles of the Dallas toy show wearing a cape with the words “Back From Vacation”, with a sign advertising the Geoffrey Toy Box booth.
Zahn also noted that the Toys R Us Twitter account has recently been cleaned up, and all references to liquidation deleted.
The canceled bankruptcy auction quickly spread through social media platforms and news outlet headlines. Ultimately, the move to rebrand Toys “R” Us was more lucrative than selling off its assets, including its trademarks.
It’s a surprising change of heart from the creditors who were prepared to shut down the company and sell it for parts just a few months ago. Apparently, the various hedge funds have concluded that bringing back the stores will be more valuable than whatever they could get from selling off the brand.
Though the “revival” of Toys “R” Us might be a financially beneficial move for the brand’s investor group, the new venture won’t provide jobs for its workers that were laid off in March.
The seeming end of Toys R Us rippled through the toy industry and beyond. When the company closed the doors at some 800 stores, more than 30,000 people lost their jobs. Less than a month later, Mattel said it would cut more than 2,200 jobs partly because of lost sales to Toys R Us.
Economists were caught off guard that month by the slow growth in jobs, particularly retail, and some blamed the collapse of Toys R Us.
Though Geoffrey, LLC didn’t elaborate on the ideas its developing to successfully launch its rebrand, the wholesale approach alone won’t make up for its lackluster digital strategy, especially as e-commerce giants such as Amazon continue to grow and toy retailers increasingly look to digital media efforts.
What do you think of the decision to rebrand Toys “R” Us?