Smaller stores, revamped larger outlets and closure of loss-making stores all part of the plan.
Toys R Us will shrink some of its stores and revamp its bigger outlets through its bankruptcy process, which may end with the company’s return to the public markets, in plans described by chief executive David Brandon at Toys R Us pop-up store in Times Square.
In detailing Toys R Us’ turnaround, dubbed ‘Project Sunrise’ by the company, David Brandon said the chain will integrate its online and in-store shopping experiences, adding faster shipping and better technology and customer service. He said the chain’s 64,000 workers would see wage increases too.
Brandon also confirmed that while private equity firms Bain Capital and KKR & Co LP and real estate investor Vornado Realty Trust currently own the retailer, it will have new owners once it emerges from bankruptcy protection. The company could exit bankruptcy through a public offering of its shares or by a traditional reorganization in which creditors convert their debt to equity. He did not rule out a sale, explaining that the company and its creditors had not yet made any decisions.
As part of the plan, the chain’s older suburban big-box shops will also be overhauled to give kids a chance to try out toys in the store. “We want toys out of the box and into the hands of kids,” Brandon said. “We know we need to do it. We haven’t had the capital to do it.” The older shops will benefit from new floor and lighting patterns and furniture to accommodate more play zones such as target ranges for Nerf.
According to Brandon, the company does not plan to close a disproportionate number of its 1,600 stores across the country and aims to add smaller shops in urban areas including Washington, D.C., Boston and Detroit. But he admitted that stores that lose money could be at risk of closing. Retailers generally have several months to figure out whether to keep or reject leases in bankruptcy.
Brandon also said that Toys R Us will also offer shoppers more stores that combine its flagship brand for kids of all ages with the infant and toddler-focused Babies R Us.