Toys 'R' Us in comeback — with a different business model and smaller format
One year after closing all its U.S. stores, Toys “R” Us is returning with a “playground environment,” a tech-driven partner and a consignment-like business model.
The retailer will open two, approximately 6,500-sq.-ft. locations at Simon’s The Galleria in Houston and at Westfield Garden State Plaza in Paramus, New Jersey. And more are coming, with additional locations in prime U.S. retail markets expected to open in 2020. (According to CNBC, the company expects to open 10 stores next year, possibly including a larger flagship in New York or California.)
The stores are a joint venture between Tru Kids and technology retailer B8ta. Tru Kids bought the intellectual property of Toys “R” Us, including the brand names of Toys “R” Us, Babies “R” Us, and Geoffrey the Giraffe, after the chain’s bankruptcy filing and liquidation last year.
B8ta, a recipient of Chain Store Age’s Breakout Retailer award in 2018, operates 17 branded stores throughout the U.S. that sell mostly tech products from up-and-coming brands utilizing an updated consignment model. Additionally, its in-house retail-as-a-service tech platform is used by brands, including Macy’s in-store pop-up marketplace concept, to power their physical retail experience.
The new Toys “R” Us stores will utilize B8ta's experiential retail model to create a playful in-store experience. They will operate the same as B8ta’s branded stores — the brands will pay for shelf space, with all sales revenue going back to the brand (manufacturer). Participating brands will be announced in the coming weeks.
"We have an incredible opportunity to entirely reimagine the Toys "R" Us brand in the U.S. and are thrilled to partner with b8ta and key toy vendors to create a new, highly-engaging retail experience designed for kids, families and to better fit within today's retail environment,” said Richard Barry, CEO of Tru Kids and interim co-CEO of the new Toys "R" Us joint venture. Barry is the former global chief merchandising officer at Toys “R” Us.
The new Toys "R" Us stores will be highly interactive and feature daily events and activities. Toys will be displayed out of the box to allow for testing before purchase and the space will feature an open play area. Brands will showcase their products in an open, “playground” environment. They also will have the opportunity to design custom experiences and branded shops. The stores will leverage B8ta's experiential retail and its tech platform, which enables brands to actively manage their in-store experiences and measure how offline experiences translate into online sales.
"We launched b8ta to change the fundamental infrastructure of retail, from the business model to the customer experience,” said Vibhu Norby, CEO of b8ta. “B8ta is proud to bring Toys "R" Us stores back to the U.S. alongside our partner, Tru Kids, and with our retail as a service platform as its engine. The new Toys "R" Us stores will be the most progressive and advanced stores in its category in the world, and we hope to surprise and delight kids for generations to come."