Toys “R” Us is scrambling to open 120 new shops by Thanksgiving — but suppliers burned by its devastating chapter in 2017 stay skittish about doing business with the retailer’s new operators, The Post has discovered.
Go Retail Group — a Texas-based business that specializes in pop-up shops, including two Disney Store Limited Time places and Calendar.com outlets — has has opened 40 year-round Toys “R” Us shops since 2024. It has opened the shops under license from WHP Global, a New York-based firm that owns 16 manufacturers including Vera Wang, Marc Jacobs, Anne Klein and Land’s End.
But as Go Retail seems to be to quadruple its quantity of Toys “R” Us places in time for the essential vacation season, it has been asking toy producers for prolonged credit phrases – asking to pay as much as 180 days after items are delivered to its shops, a number of sources advised The Post.
Toys “R” Us is opening 120 new non permanent shops by Thanksgiving, the company said in September. instagram/toysrus
In response, many distributors have pushed back, with some noting that the industry norm for stock financing is between 30 and 90 days.
“They should be the ones financing the business, not their vendors,” said Jay Foreman, chief govt of Basic Fun, maker of Tonka Trucks and Care Bears. “We went down that road once before and got badly burned and won’t put ourselves in that position again.”
Alan Dorfman of Super Impulse — which makes tiny, pocket-sized variations of toys and video games including board video games like Battleship, Connect 4 and Hungry Hungry Hippos — is also holding back.
“We hope to be part of it, but we are not yet shipping to them,” Dorfman advised The Post. “We have worked with Go Retail in the past but there were some bumps in the road and we are trying to get things back on track.”
Founded 70 years in the past by Charles Lazarus, the retailer operated more than 800 Toys “R” Us and Babies “R” Us shops in the US when it went stomach up and liquidated in 2018. It was saddled with $5 billion in debt after being acquired by non-public equity giants Bain Capital, KKR and Vornado Realty Trust in 2005.
Jay Foreman, president and CEO of Basic Fun, objects to the cost phrases Toys “R” Us is offering distributors. Xinhua News Agency/Getty Images
The implosion sparked thousands and thousands of {dollars} in losses and years of chaos across the US toy provide chain. It also left longstanding bitterness among industry veterans.
Nevertheless, WHP Global has tapped Jamie Uitdenhowen, Toys “R” Us’s former vice president of merchandising, as govt vice president of the revived model. Matthew Finigan, who had served as the company’s treasurer before the chapter, is now the model’s chief financial officer.
“There’s hesitation to do business with them because of the terms they are asking for,” said Michael Drake who headed up boys toys at Toys “R” Us headquarters in Paramus under Lazarus and says he has spoken with a dozen toymakers.
WHP acquired the model in 2021 and launched partnerships with Macy’s and Go Retail among other smaller tie-ins. It has licensing partnerships overseas that operate some 1,680 shops in 37 nations.
“Like any retailer, we work to secure the best possible terms with our suppliers,” Go Retail CEO Gideon Schlessinger said in a assertion. “We’ve been in the toy business for 26 years, managing significant seasonal inventory commitments and building longstanding vendor relationships. Our approach to purchasing and payment arrangements has been consistent throughout our history and remains unchanged today.”
Jamie Uitdenhowen is govt vice president of the Toys “R” Us model and had overseen the company’s merchandising before its chapter. Toys”R”Us
In addition to Macy’s, there are some 40 Toys “R” Us shops opened in the US over the the previous several years. A 20,000-square-foot flagship at American Dream mall in East Rutherford, NJ is run by a licensing companion called Parade Stores Inc., a Toys “R” Us spokesperson said.
Go Retail operates all of the other freestanding places, including the further 120 shops that are principally opening in malls for about one yr, a spokesperson for the company advised The Post.
“We have not experienced any hesitation from suppliers about working with us under the Toys “R” Us model,” Schlessinger said. “In fact, the strength and growth of Toys “R” Us have only enhanced those relationships.”
The store growth comes as the $46 billion US toy industry is on an upswing with gross sales growing by 17% in the first half of the yr — or the largest such increase in six years, according to Circana. In its heyday, Toys “R” Us was the place where the industry launched new merchandise, showcased the newest trends and allowed households to work together with the toys they might buy.
Geoffrey the Toys “R” Us mascot at the Macy’s Thanksgiving Day parade, is featured in 350 toy departments at Macy’s. WireImage
Still, some query the retailer’s relevance at this time as rivals like Walmart, Target, Amazon and Five Below have expanded their toy choices.
“It’s a tougher landscape for them to come back to,” said toy analyst Gerrick Johnson of Seaport Research. “Because others have stepped into the void they left.”
Before the chapter, most Toys “R” Us shops were about 30,000 sq. ft, in contrast with the Go Retail shops that are between 3,500 to 7,000 sq. ft, say industry consultants.
“The 120 mall pop ups won’t do the volume of even 20 Walmart stores,” predicted Foreman of Basic Fun.
Tom Neville, vice president of gross sales for Connetix, an Australian-based company that makes colourful, magnetic tiles, said he was shocked to study from The Post that Toys “R” Us was already promoting his company’s merchandise online.
“They are definitely not buying directly from us,” Neville advised The Post, including that he guessed ToysRUs.com bought Connetix from a distributor.
Alan Dorfman, co-founder of Super Impulse, said there have been “bumps” in his previous dealings with Go Retail. Linkedin/Super Impulse
Neville said he had intentionally “stayed an arm’s length” from the toy departments at Macy’s that are branded Toys “R” Us, of which there more than 350, according to Macy’s.
“Most of the time you go into a Macy’s [toy department] and it’s sad,” Neville said. “It’s not merchandised well. The shelves are empty off season.”
Macy’s declined to remark on its toy choices. The company has since closed dozens of shops since the partnership started in 2022.
Others are still on the fence about partnering with Toys “R” Us.
“I’ve been wondering whether the [new operators] are going to make this unique and bring in something new and different from what you can find on Amazon,” said Brian McDonald, vice president of gross sales and advertising for Ohio-based Simplay3, maker of outside exercise units and toys.
The new shops are much smaller than the unique Toys “R” Us shops that were closed after its chapter submitting. instagram/toysrus
Simplay3 is open to working with Toys “R” Us, McDonald said, “but we got burned pretty good [by the bankruptcy], losing nearly $1 million and we would definitely be more cautious because of who they are.”
At the same time, “there’s also fear about missing out on an opportunity,” added Drake, the former Toys “R” Us govt.
