Nobody seems to know what the hell is really going on with Toys R Us this week. Also, KayBee Toys, which promised to be a major presence in malls this holiday season, hasn’t made a peep since May, which is of concern since seasonal stores really should be open by now.
The big bombshell news this week was that the lenders who hold the intellectual property of Toys R Us, including trademarks, websites, and private-label brands, filed papers with the bankruptcy court on Tuesday to cancel the expected auction of those intellectual property assets with the intention to use them to create a new business entity themselves.
They did this on the eve of the Toy Association of America’s annual Fall Toy Preview in Dallas, and they coincidentally debuted their new business there on Wednesday. The problem is, what they’ve announced is so vague that a person couldn’t be blamed for thinking that they’re just making it all up as they go along.
As seen at right, Geoffrey (reportedly with someone surprising inside the suit) was wandering the aisles at the Fall Toy Preview, offering photo ops to anybody who wanted one, and wearing a cape that said “Back from Vacation.”
One thing is clear: Whatever their plans are, they’ve been in the works for months. The auction of the intellectual property assets was supposed to have happened in July, and it seems likely that bids were submitted, and came in so low that the current caretakers of the IP decided to keep it for themselves.
What isn’t clear is just exactly what they intend to do with it.
The new business is “Geoffrey’s Toy Box,” and while there have been references to new stores, there are also references to retail partners, as well as this description of what they are: “A wholesale toy distributor and intellectual property company whose focus is on popular play patterns across trusted brands that kids and parents love. Geoffrey’s Toy Box is a fully outfitted organization with design, development and global sourcing expertise. Portfolio includes popular brands like Journey Girls, Fastlane, True Heroes, You & Me, Imaginarium, Just like Home and more!”
Speculation has run rampant, and folks on social media are going crazy at the idea of Toys R Us rising from the ashes and reopening old stores. That simply is not going to happen. At least not anytime soon.
Leaks, rumors and press statements tell a tale of a large cardboard display, shaped like a train with Geoffrey the Giraffe as engineer, that would hold an assortment of those private label brands that were previously exclusive to TRU. Hints and allegations indicate that the most likely location for this toy boutique would be Kohl’s, or possibly some other Midwest-based retailer. If this happens, it’s a short-term move designed to keep the trademarks in front of the public. That idea, is massively underwhelming. It could even be a bit of misdirection.
Supposedly, these displays will start appearing in November, which would indicate that this plan has to have been in the works for several months. I’ve been trying to find out what was happening with the IP auction since July, and it seems that they knew early on that it was not going to happen. If you recall, Toys R Us had a massive liquidation sale and shut down all 800 of its US retail outlets back in June, after lenders refused to extend the company any further credit after a disastrous Chistmas season in 2017.
Reportedly, the lender behind this week’s move is Richard Barry, who is rather controversial in the toy business, with one toymaker going on the record accusing him of engineering the entire Toys R Us bankruptcy as part of a massive fraudulent scheme.
According to some sources, Barry was actually wearing the Geoffrey the Giraffe suit at the Dallas Toy Preview. This could just be part of a plan to get higher bids for the IP, or if you believe the wilder conspiracy theories, the entire bankruptcy was designed to rip off as many people as possible while killing the retail end of the company.
That conspiracy theory may not be so wild after all. The people who currently own the intellectual property are the same people who essentially ran the company out of business in the first place, and at least one major toymaker has vowed to never let those people sell his toys again. That would explain the emphasis on their private-label brands, instead of touting themselves as “where the toys are.”
I didn’t jump on this story sooner because it’s still developing, and all I can do is share the incomplete knowledge that’s already out there.
That may very well happen, but the company has not made any announcements since last May, and seasonal pop-up stores should at least be confirming locations and hiring by now.
One report has KB Toys opening 1,000 pop-up stores on Black Friday, but even at that late date, the stores will need to be stocked and staffed, and with not even their Facebook page being updated since early May, it seems like this revival may not happen this year. As I write this, no local mall has any deal in place for a KB Toys pop-up. It is possible that this is the most efficient stealth retail launch in history, but it’s looking a bit like there’s a slim chance we’ll see KB Toys return this year.
Meanhwile, Party City opened up around 50 temporary “Toy City” stores around the country beginning in late August. These are combined with Halloween City, and the closest one to Charleston is just North of Columbus. While it’s cool that they were able to pull this off on such short notice, it looks like the selection at those stores is not unlike the typical type you find at pop-up stores, with a heavy emphasis on big-name toys like Barbie, Lego and Hot Wheels, plus a lot of board games and not much in the way of offerings from smaller toy companies.
Elsewhere, almost every retailer that has a toy department is beefing them up for the holiday season. Bookstore chains, Barnes & Noble and Books A Million are devoting half of their floor space to toys now. Walgreens is looking to expand their toy offerings. Kroger is mulling over the idea of creating a larger-than-usual seasonal toy section and Walmart and Target are expanding their toy departments by as much as 50%.
PopCult will revisit this story as further developments occur.