New stores, new toys and a list of 100 ideas to grow the company.
That’s what Doug Putman has in mind for Toys “R” Us and Babies “R” Us Canada once he finalizes a deal to acquire the retailer’s 81 locations.
Putman Investments announced it would purchase the Vaughan, Ont.-based toy and children’s store from Fairfax Financial Holdings Ltd. last week for an undisclosed sum. Fairfax will receive a royalty stream and keep the real estate it acquired when buying the retailer in 2018, while Putman Investments will control the stores.
Putman, the founder and owner of music store Sunrise Records, has a record of helming retail turnarounds, having launched the T. Kettle chain of tea shops in former DavidsTea locations early in the pandemic. He also bought the Canadian assets of HMV back when the British music retailer went bankrupt.
Toys “R” Us is his latest challenge. The company collapsed in 2017 amid slipping sales and mounting debt. It buckled under intense price competition from mass retailers like Walmart and Amazon, though experts criticized the company for failing to update its business model even as consumer behaviour changed and demand for online shopping increased.
But the COVID-19 pandemic offered an unlikely twist of fate for the retailer. Parents stuck at home during lockdowns scrambled to find distractions for their freshly home-schooled children, buying toys that might keep them from video-bombing daily Zoom meetings.
According to NPD Group, a market research firm, toy sales across the industry surged by 15 per cent globally in the first half of 2021. Toy sales were led by outdoor and sports toys, along with dolls and building sets. Staple gaming brands like Pokemon, Barbie and Star Wars were among the top selling products.
The boom may have resurrected the Toys “R” Us brand. On Thursday, New York-based retailer Macy’s announced plans to open 400 Toys “R” Us stores inside its department stores starting next year. And Putman says now is the chance to boost the brand’s sales in Canada.
“Our belief is we’re going to see tremendous growth over the coming years,” Putman told the Star. “As parents keep their kids away from iPhones and iPads, we think we’re going to see phenomenal sales in outdoor toys and educational learning activities.”
Already, Putman is eyeing several Canadian expansions. The company has a list of 100 ideas to grow, he told the Star, including opening new brick-and-mortar stores in the next 12 to 18 months. The plans also include using existing stores as places where kids could host birthday parties or eat food. Seizing on a demand for toys devoid of screen technology, Putman says he also wants to expand the stores’ collections of kids books.
The website will also likely undergo some changes to better compete in the online shopping world, he said.
“If we can make the stores more enjoyable and the website more user-friendly, there’s a lot of growth potential on those two elements alone,” he said.
“We need a hybrid of in-person and online stores. We’re going to focus on improving our online presence, but we need places where kids can go in-person, too.”
The company’s most valuable asset, ultimately, is its name, Putman said.
“Canadians know this brand. They remember growing up with it. So when the opportunity came up to buy it, it seemed like an obvious business we’d want in our portfolio.”
Source: Toronto Star
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