When Toys R Us declared bankruptcy and ultimately shuttered this past summer, it was a familiar tale—yet another retail giant deeply in debt with too many locations, unable to compete with the rapid market changes over the last decade. Now, the lenders behind the liquidation are looking to revive the business—keeping the intellectual property including the Toys R Us and Babies ‘R’ Us names as well as its famed giraffe mascot—with a wholesale play allegedly called Geoffrey’s Toy Box.
But is it possible to successfully resurrect a business with that much baggage? If the lenders take a startup approach and rethink the retail experience for consumers it can be, according to analysts. (Calls and emails to the lenders and lawyers involved with the revival were not immediately returned.)
Without a brand truly owning the toy space, it’s a wide open market giving the company an edge, according to branding consultant and Metaforce founder Allen Adamson. “The challenge Toys R Us had was tons of debt, lots of real estate and they never capitalized on owning the toy business,” said Adamson. “They would have to reinvent the business from a different perspective. Probably start with online and add a few select physical locations in key markets to act as showrooms and truly become a toy expert—not a mass-marketer of cheap toys.”
“This is going to be really, really tough,” said Christopher Lehmann, managing director of brand consultancy Landor’s San Francisco office. “Multiple and significant causes led to the failure of the Toys R Us brands. It’s unfortunate but true that these brands were always more generic box stores rather than distinct, differentiated brands with appeal beyond products on shelves.”
Lehmann continued: “The lenders will have to overcome massive debt, increased competition from Walmart, Target, Costco, and especially Amazon, and the company’s failure to make their most important asset—their retail space—dynamic and experiential, in order to revive the brand.”
Without using price as a draw, as consumers will likely be able to find things cheaper at Amazon or Walmart, the company will need to focus on reinventing the brand as a toy expert, explained Adamson. “Do it online, curate it, be very focused, be smaller and different,” said Adamson. “There’s not another brand that owns toy as squarely with older consumers as Toys R Us. They need to look at it as a startup—not a relaunch of the old Toys R Us—if they do that they have a chance. They’ll be successful if they think small.”
Lehmann agreed: “Consumers won’t stop buying toys from Walmart and Amazon, but those channels can’t ever own toys and play and kids like Toys R Us has and can again.”
To successfully revive the brand, analysts suggest starting online with consumers “experienc[ing] online the world of play,” suggests Lehmann, then growing to a smaller footprint with a reimagined brick-and-mortar retail experience.
“The brand can make the in-store experience one that is much more than a bunch of toys displayed on retail shelves,” said Jim Fosina, CEO and founder of digital marketing shop Fosina Marketing Group. “Think about a playground, learning center, new toy trial areas etc. … a combination of a theme park and test lab for kids to enjoy the toy experience while [parents] shops.”
It will be crucial for the in-store experience and the online ecommerce experience are integrated, noted Fosina, adding, “Toys R Us also needs to create a ‘personalized shopping’ relationship (aka Stitch Fix model) that leverages [parents’] persona and transaction history into a service that provides products, toys and services that appeal to [parents] as effective, time-saving and economical.”
Another important change will be to “get out of the mindset of being a big-box retailer and start thinking like kids—and parents,” said Lehmann. “Build a brand with imagination, curiosity, exploration, surprise, invention, wonder, and—yes—play at the heart of everything you stand for, everything you do. Be the expert and be engaging, and, once successfully defined, be true to who you are.”
Adamson put it simply: “They have to take the name and reimagine it. If they come back with the smiling giraffe and buy-one get-one free, they’re dead on arrival.”