Toys R Us has officially emerged as a new company – Tru Kids Brands – with new leadership and a new retail strategy that will include an omnichannel approach and smaller footprint.
January 20th saw the new company, Tru Kids Inc., trading as Tru Kids Brands, become the parent company of Toys R Us, Babies R Us, the mascot Geoffrey the Giraffe, plus more than 20 established consumer toy and baby brands.
Richard Barry, the former global chief merchandising officer at Toys R Us, will serve as president and CEO of Tru Kids Brands. An experienced management team is also in place, including Matthew Finigan as CFO, James Young as executive vice-president of global licence management and general counsel, and Jean-Daniel Gatignol as senior vice-president of global sourcing and brands. Brand management veteran Yehuda Shmidman will serve as vice chairman to advise on global strategy and execution. Shmidman is the CEO of Wave Hill Partners, and the former CEO of Sequential Brands Group.
As the realities of Q4 2018 toy sales come to light, Barry claims the newly formed company is seizing this moment as an opportunity to tap into the continued strong affinity for the Toys R Us and Babies R Us brands. In the US, the brands have more than 9.5m followers across their social media channels. In Asia, Europe, Africa and the Middle East, the brands generated more than $3b in global retail sales in 2018 across more than 900 stores and e-commerce businesses in more than 30 countries.
“As we start the year there is a lot to be excited about,” Richard said. “We have a healthy and growing global business with great partners that are 100% focused on opening more stores and e-commerce channels in their respective markets. We have an experienced team with unmatched industry expertise in the toy and baby space and a clear understanding post-holiday of the opportunity that still exists in the US marketplace.”
Looking forward, the company’s No. 1 priority will be to ‘solidify the US retail strategy for Toys R Us and Babies R Us’. Richard added: “While I can’t say today what that exact strategy is, we do know that we will have an omnichannel approach that is tech immersive and experiential with a smaller footprint. I’ve spent my entire adult career working at Toys R Us and feel proud to be a part of ensuring the next chapter of this iconic brands lives on.”
As of now, global partners include Al Futtaim Sons Co. LLC (UAE), Green Swan (Iberia), Keshet-Hypertoy (Israel), Lotte Shopping Co. (S. Korea), Marketing Services and Commercial Projects Operation Company (Saudi Arabia), Tablez & Toyz Private (India), and Toys (Labuan) Holding in partnership with Fung Retailing (Asia). The company will work closely with each to expand the Toys R Us and Babies R Us businesses in their respective markets as well as actively seek opportunities to bring the brands to new and emerging territories.
These global partners are set to open 70 stores in 2019 in Asia, India and Europe and develop new e-commerce platforms in several key markets.
Tru Kids will be headquartered in New Jersey, just as the original company was, with a team that will include returning Toys R Us employees. Tru Kids will serve as the parent of brands including Toys R Us, Babies R Us, Geoffrey the Giraffe, and house brands Journey Girls, Fastlane, True Heroes, You & Me, Imaginarium, and Just Like Home.
“Despite unprecedented efforts to capture the US market share this past holiday season, there is still a significant gap and huge consumer demand for the trusted experience that Toys R Us and Babies R Us delivers,” said Richard.
The news was met harshly on social media. Thierry Bourret, a toy industry business development specialist, commented on LinkedIn: “So, you go bankrupt leaving masses of debts, while paying yourself a bonus for overseeing the debacle you created. And let’s not forget pay no or very little compensation to the staff. Then you wait a few months and create a new business with the same financiers, same management and start again? Seriously?”
Posted alongside a host of other reactions on Toy World’s social media accounts, one reader commented: “It was a slimy manoeuvre to wipe the slate clean, and come back without debt, but all the same people so they can milk the cow dry one more time.”
Another reader summarised: “What’s the best way to get rid of your responsibility to thousands of workers, millions in debt, and an array of ruthless cost cutting measures, but then come out on top by creating a model solely beneficial to the IRR you show your investors…they found the model and it seems the bankruptcy court just allowed it to happen. They should at least work off their debts and make some sort of fund for all those poor employees they short changed.”