More funding sought by Strategic Marks for KB Toys relaunch

Published on: 18th March 2019

Strategic Marks has fallen short in its efforts to secure funding from toy manufacturers and mall operators.

Speaking to LIMA, CEO Ellia Kassoff has revealed that the company is seeking an investment bank for help in raising funding, but has scaled back plans after failing to open any of the 1,000 temporary stores it had proposed for last year. Ellia has now outlined plants to open 200-250 mall-based and freestanding locations this year, starting with tests in select markets, including the New York metro area.

Strategic Marks unveiled its original plan in the wake of Toys R Us liquidation last March. The loss of the retailer saw a number of retailers move to fill the gap by increasing their toy offering, while others opened toy-focused stores such as Party City-operated Toy City.

According to Ellia, “toy companies had lots of conflicts of interest” that prevented them from investing in the relaunch of KB, given that they sell to other retailers and mall operators don’t typically invest in prospective tenants. “It is taking a while to get this done and build out a strategy. Once we get the money together we will be off and running,” he added.

Strategic Marks will now focus on securing short-term leases for temporary KB stores so that locations and sales volumes can be tested during both holiday and non-holiday periods. It will open both smaller mall-based locations and larger freestanding stores similar in size to Toys R Us, whose stores averaged around 32,000-sq.-ft.

“The idea is to create temporary locations where we can try out the market and see how it goes, and if we are successful turn it into a permanent location,” said Ellia. “If it is not successful, we will close it and move to another location.”

Strategic Marks registered a trademark for KB Toys in 2016, after Toys R Us – which acquired the bankrupt chain’s assets seven years earlier – let the previous registration lapse. KB, which at its height operated more than 1,000 stores and was one of the country’s largest mall-based retailers, filed for bankruptcy for a second time and closed in 2008.


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