Since Geoffrey LLC canceled its IP auction this week and took Toys “R” Us (TRU) and Babies “R” Us (BRU) IP in house, I’m hearing a lot of speculation about what the future holds for TRU.
Geoffrey LLC is the holding company for TRU and BRU intellectual property. Now that the company has taken it back in house (under a newly restructured company made up of some of the lenders that took the retailer through bankruptcy), it has the option of either producing product under this IP itself and selling it to other retailers, licensing the IP to another company, selling the IP, OR opening new brick-and-mortar stores.
Just as many consumers finished going through the stages of grief and finally accepted that TRU isn’t coming back, this announcement has resurrected a lot of hope, and a million questions.
According to Richard Barry, EVP of global merchandising at Geoffrey LLC, and former TRU executive, there are a number of potential parties interested in opening brick-and-mortar TRU stores, but nothing is set in stone. There is not currently a deal in place, and there is no assurance that a deal of that nature will come to fruition.
What is certain, is that multiple retailers will soon launch store-in-store concepts under the Geoffrey’s Toy Box IP, with branding that will look very familiar to the toy industry as well as consumers. None of the retailers have yet been named, but one has been described as a “prominent regional Midwestern retailer.”
The shop-in-shop concept is available to additional retailers as well, and will launch in these locations in November. The merchandising will likely look different from retailer to retailer, but will consist of mainly pallet-style units, which may be placed end-to-end like a train down a main aisle, or in a circle around the entire store. All product merchandised this holiday season at these locations will be proprietary TRU IP.
Let’s say Geoffrey LLC does partner to open new brick-and-mortar stores. What would that look like? When could it happen? Where would the stores be located? Geoffrey LLC doesn’t have answers yet, because there are no firm plans in place.
What I’ve heard from speaking with manufacturers, is that there could be some hesitance on their part, to “a new TRU,” for a multitude of reasons. Many manufacturers shipped product in January, assured that they would be paid, and never were. The product they shipped was liquidated, and now they’re receiving pennies on the dollar. Some say this was purely a financial decision, and the thought of a new TRU just doesn’t rub them the right way. Other manufacturers would welcome a new TRU; some may only have had placement at retail because of TRU’s ability to sell such depth and breadth of product, and its willingness to try out innovative new lines.
There were TRU buyers walking Fall Toy Preview in Dallas, which may have caused some additional speculation, but according to Geoffrey LLC, those buyers were attending on behalf of international franchisees.
Consumers would likely flock to new Geoffrey’s Toy Box stores out of excitement and curiosity. To succeed, however, these reimagined stores would need to take a hard look at what went wrong the last time around, and put together a plan for success. The plan would certainly need to find points of difference that will not only draw consumers, but keep them coming back.
More details to come!
