Will Toys R Us turn it around? The failed toy retailer that was once the gaming mecca for young families and children had to file for bankruptcy last year. However, according to the Wall Street Journal, there may be a Toys R Us comeback on the horizon.
A Toys R Us Comeback?
The retailer announced yesterday that is has canceled its upcoming bankruptcy auction. The auction was to sell off intellectual properties such as brand names, website domains, and, most poignantly, the company’s well-loved mascot Geoffrey the Giraffe. (Insert tear drop emoji here.)
So how is Toys R Us turning it around? Well, under a proposed reorganizational plan the company is going to relaunch a new retail business using those assets.
According to court filings, the reorganizational plan:
“contemplates a new, operating Toys ‘R’ Us and Babies ‘R’ Us branding company that maintains existing global license agreements and can invest in and create new, domestic, retail operating businesses under the Toys ‘R’ Us and Babies ‘R’ Us names.”
Court papers cited by the Wall Street Journal said that selling Toys R Us intellectual property was “not reasonably likely to yield a superior alternative,” as opposed to the reorganizational plan that the company filed in September.
We will have to wait a little longer for more details on this so as to understand how this plan translates in real-life.
The Struggle is Real
Either way, it will be hard to successfully implement a Toys R Us comeback. The brand has struggled for years, fighting against giants such as Amazon (NASDAQ:AMZN), Walmart (NYSE:WMT), and Target (NYSE:TGT).
Toys R Us lost $330 million in the first half of 2018, with sales falling by 5%. It has lost over $1.8 billion since it last reported an annual profit five years ago.
Earlier this year, the toy superstore finished the closure of its retail locations, a move that affected more than 700 stores and tens-of-thousands of jobs.
What will a Toys R Us comeback mean for the store? A move to e-commerce perhaps? Downsizing and focusing on ‘craft’ toy brands maybe? Who knows.
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