Toys ‘R’ Us Canada – How They Stayed Successful After U.S. Bankruptcy

It’s the retail story of legends — despite its U.S. parent company going bankrupt, Toys ‘R’ Us Canada has managed to beat the odds.

From March to June 29, 2018, the U.S. retailer closed all 735 of its American stores after failing to find a buyer or restructure its $4.9 billion USD debt. Toys ‘R’ Us U.K. also shut its doors, closing all 75 locations in the country.

But Toys ‘R’ Us Canada found a buyer — Fairfax Financial Holdings Ltd — who bought the company for $300 million in early June.

Toys ‘R’ Us Canada has 82 stores, employs more than 4,000 people, and brings in more than $1 billion per year in sales. And that’s despite having a somewhat dated big-box store look, a relatively small digital footprint among online competitors, like Amazon, limited reinvestment potential from loaning money to its U.S. parent.

So, how have they done it?

There’s no clear answer to what has kept Toys ‘R’ Us Canada thriving, but Toys ‘R’ Us Canada president Melanie Teed-Murch attributes success to quick action and trend-watching.

“We move with the pace of change in Canada,” she told Barrie Today.

Successful Canadian measures have included:

  • Weekend events at stores, including a “Make and Take” program that allows children to put together toys and take home a small freebie.
  • Offering wifi in all stores.
  • Using tablet-assisted sales.

Moving forward, there are plans in the works to makeover the Canadian brand towards a more experiential-retail concept. This includes?

  • Lower shelving.
  • Grouping toys by children’s ages, stage, and play patterns, rather than by brand.
  • Adding interactive play areas.
  • Creating places for parents to sit down.
  • Introducing mobile pay.
  • Reconfiguring the checkout area to process payments and online pickups quickly.

Future plans could also include a food-service partner, in-store birthday parties, and themed events like workshops about fitness, child development, and science and learning.

A similar experiential restructuring has worked well for Indigo Books and Music Inc. and Cineplex Inc.

Much of Toys ‘R’ Us success has happened in-store; only about 10% of sales are digital. Teed-Murch has also said there will likely be room to grow online, too.

What do you think? Will this approach work for Toys ‘R’ Us Canada? What do you think contributed to their past success? Let us know on social media. Storesupport Canada is on Facebook, Twitter, and LinkedIn.

Storesupport Canada helps Canadian retailers and manufacturers make sure the in-store and digital customer experience are the best they can be. See how we can help your brand. Call 1 877 421 5081 or visit www.storesupport.ca.

FacebooktwitterredditpinterestlinkedinmailFacebooktwitterredditpinterestlinkedinmail