Toys R Us Reopening Was Not Successful

The ‘Toys R US’ chain planned a small-scale comeback last Christmas, but it turned out to be a massive flop. They were hoping that American kids would not have to live through Christmas without the toy chain.

After a painful bankruptcy, the 'Toy R US' remaining stores were set to return last December by opening about a half dozen U.S. stores and an online business site, according to toysrus.com. The toy chain in the U.S. filed for bankruptcy protection in September 2017, and announced later in May 2018, that it would close or sell its 885 stores after failing to find a buyer for the toy chain business.

Online shopping brought fierce competition in prices and discounts, but online shopping is not to blame for the death of the toy chain. It is no surprise, therefore, that many of the toy store's wounds were self-inflicted, as they continue to be.

The company was billions of dollars in debt, and this prevented the store from making needed investments. The business failed to keep up with current kids’ trends, which give children experiences rather than possessions. In an era where shopper experience matters, the toy retailer failed to create an experience worth having.

'Toys R US' reopening was welcomed with much enthusiasm from both parents and kids who looked forward to the revamped shopping experience. However, the reopening was not as huge as was expected. Here’s why.

The New ‘Toys R Us’ Stores Are Unrecognizable

According to the Daily Republic, the reopening effort made by the joint efforts of Tru Kids Brands and b8ta resulted in much smaller stores than the ‘Toy R US’ predecessors.

That can be a good thing because the focus is narrowed down to interactive displays, open play areas, and spaces for special events like birthday parties. Nevertheless, more emphasis should be put in the store’s online presence, to compete effectively with other major toy brands available online.

Put in Howard Davidowitz's words told to the Washington Post regarding the survival of toy stores, "…they've got to create the kind of fun that Amazon can't."

Only 2 Stores Exist Now

The first two stores opened in New Jersey and Texas last Christmas. The much smaller retail concept that offers a more immersive experience is yet to 'wow' the consumers. Although the stores are very different from the stores that closed down, the management is yet to give something that will get people to slow down on the use of their phones and go into the stores.

The new stores are high-touch as well as experiential, and they have their fans, but it will take some time for the stores to have a huge number of shoppers that their predecessor had.

On a positive note, cnbc.com reported that Tru Kids is still planning to open 10 stores nationwide in 2020, which could include a larger New York flagship.

It Is Still Too Expensive

'Toys R US' is still selling items at much higher rates than its rivals are. Even with the shop’s price reductions during last November’s Black Friday sales on theblackfriday.com, items were still more expensive compared to the store’s rivals.

The company was slow to adapt to online shopping, and it is struggling to keep up with the huge discounted prices that other retailers offer.

There Are New Rivals In The Market

‘Toys R US’ is trying to compete on fun, given that the company does not have hundreds of stores like Walmart or same-day delivery like Amazon.

When the original ‘Toys R US’ closed down, it left a huge hole. Walmart Inc., Target Corp., and Amazon.co Inc. jumped in to fill the gap. According to Forbes, ‘Toys R US’ is encountering a different market place than it did two years ago.

With a full year to plan for last year's holiday season, Walmart, Target, and Amazon were better prepared and had an edge over their competitions. In addition, given that many investors encountered major losses when 'Toys R Us' announced liquidation in March 2018, it remains to be seen how many toymakers will do business with the new 'Toys R US' stores.

With Walmart, Amazon, and Target, the big three, taking over the toy category, the Toys market is tougher than ever. 'The big three' have only gotten bigger and they can compete for the larger toy dollars. While it may seem like there is no room left for anyone else to compete in the market, the new 'Toys R US' can find some room if they have some offering on price and convenience.