Bloomberg reports indicate that the hedge funds that own the toy retailer plan to relaunch it as a standalone operation next year.
Solus Alternative Asset Management and Angelo Gordon will look to raise capital to help revive the retailer, which closed its last stores at the end of June, and are making plans that include brick-and-mortar locations for the chain, according to people familiar with the matter.
Before opening their own establishments, the funds are partnering with Kroger, the largest grocery store operator in the US, to create pop-up sections named Geoffrey’s Toy Box in about 600 stores, according to two of the people. The areas inside the supermarkets will operate this holiday season, selling a selection of toys from brands like Imaginarium and Journey Girls.
The bigger plan is still in the works, the people said, and could change depending on various factors including financing. Representatives for Angelo Gordon and Solus Alternative Asset Management did not comment.
Rebuilding the Toys R Us brand remains a daunting task, especially since the chain’s leases and distribution centers were sold in the liquidation. While a few retailers have found a second life after liquidating, it’s usually been online only or as a section in another store.
Solus and its cohorts didn’t set out to be merchants, having assumed control of the Toys R Us and Babies R Us brands because the intellectual property served as collateral on their loans, which the troubled retailer defaulted on after filing for bankruptcy. The funds initially put the IP rights up for auction, but canceled the sale, arguing that holding on to them was better than the offers it received.
The process, however, prevented them from formulating a plan in time for the critical holiday shopping season. Many toy vendors now say they’ve simply moved on.
The plans for a relaunch of the brand, first reported by Bloomberg last month, don’t sit well with former workers, who blame the funds for the company’s liquidation and the loss of 33,000 jobs.