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Toys R Us has officially emerged as a new company with new leadership and a new approach. The company liquidated last year after an unsuccessful holiday season in 2017. Toys R Us was saddled with heavy debt acquired when Bain Capital and other firms took the company private in 2005. By the time the company was approaching bankruptcy in 2017, it still had about $5 billion in liabilities. Those debt payments turned out to be a metaphorical anchor around mascot Geoffrey the Giraffe’s long neck.
In addition, observers tended to point to competition from online retailers as the cause of the 2017 weak season. Effective January 20, 2019, however, Tru Kids, which has been doing business as Tru Kids Brands, became the parent of Toys R Us, Babies R Us, Geoffrey, and more than 20 established consumer toy and baby brands.
Tru Kids Brands will be led by Richard Barry, the former global Chief Merchandising Officer at Toys R Us, who will serve as President & CEO. An experienced management team includes Matthew Finigan as CFO, James Young as EVP of Global License Management & General Counsel, and Jean-Daniel Gatignol as SVP of Global Sourcing & Brands.
The company also appointed brand management veteran Yehuda Shmidman 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.
By becoming a parent company, Tru Kids is taking over several legacy brands. For over 70 years, Toys R Us has sold toys as a large retailer, and Babies R Us has been a popular destination for new and expecting parents. Geoffrey the Giraffe, instantly recognizable, has been the mascot of Toys R Us for more than 50 years.
Toys R Us and Babies R Us generated over $3 billion in global retail sales in 2018 through more than 900 stores and e-commerce businesses in over 30 countries across Asia, Europe, Africa, and the Middle East. In the United States, Toys R Us and Babies R Us maintain notable brand visibility, with 9.5 million followers across their social media channels.
“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,” says CEO Barry. “We have a once-in-a-lifetime opportunity to write the next chapter of Toys R Us by launching a newly imagined omnichannel retail experience for our beloved brands here in the US. In addition, our strong global footprint is led by experienced and passionate operating teams that are 100 percent focused on growth.”
Tru Kids’ global partners are set to bring Toys R Us and Babies R Us to more customers through the opening of 70 stores this year in Asia, India, and Europe and the development of new e-commerce platforms in several key markets. These e-commerce platforms will likely decide whether the revival of these brands is or isn’t successful. Customer behaviors have changed. Parents have come to experience unprecedented convenience in online shopping and today’s young children don’t beg to go to toy stores, as previous generations did. The new Toys R Us must adapt.
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