There’s a new twist in the Toys “R” Us Canada saga, as the court has approved splitting up the business across three unique transactions amid the company’s restructuring under Canada’s Companies’ Creditors Arrangement Act, a process similar to Chapter 11 bankruptcy in the U.S.
The most interesting of the three puts the company’s IP and trademarks in the hands of NECA owner Ad Populum. Led by Joel Weinshanker, Ad Populum has been playing corporate Pac-Man in recent years, gobbling up companies, brands, and other IP across toys, collectibles, retail, and entertainment. Recent deals include the acquisition of Diamond Select Toys and Gentle Giant, Diamond Comic Distributors, and Party City, which join Rubies, Smiffys, Amscan, Chasing Fireflies, WizKids, KidRobot, and Elvis Presley’s Graceland in the growing portfolio.
Under the court-approved sale, trademarks including Toys “R” Us, Babies “R” Us, and Geoffrey the Giraffe will be controlled by Ad Populum, but only in Canada. WHP Global owns and manages the Toys “R” Us brand and its associated IP in the U.S. and worldwide.
A second transaction allows Fox Group Jumbo Canada Inc. to acquire the lease for a Toys “R” Us Canada store at Vaughan Mills near Toronto. The location will become a Jumbo store as the Greek retailer continues its Canadian expansion.
Finally, the third transaction spins off 10 Toys “R” Us Canada locations (and additional operating assets) to 2625229 Ontario Inc., an entity led by Doug Putman, head of Putman Investments and the owner of Toys “R” Us Canada since acquiring it from Fairfax Holdings in 2021.
Putman’s group maintains the license to operate as Toys “R” Us Canada until January, at which time it will have to enter into a new licensing agreement with Ad Populum or rebrand its stores under a different name or concept. Putman’s portfolio includes Sunrise Records, HMV, FYE, Crazy Forts, and Famous Toys. Additionally, Everest Toys, which once served as the foundation of the business, remains in receivership.
For now, it’s unclear what Toys “R” Us Canada will look like going forward, as its store fleet has diminished in recent years, dropping from more than 80 five years ago to fewer than 20 upon the reorganization filing this year. No word yet on when the trio of asset sales will close, nor on the value of each deal.
Meanwhile, the rest of the Canadian toy retail business is seeking stability following years of upheaval, including recent woes at Toys “R” Us Canada’s primary competitor, Mastermind Toys. That chain emerged from reorganization with sights set on a franchise model, which, just six months ago, CEO John Bayliss was touting in the press. Bayliss, less than a year into the job, left the company in April to join Canadian grocer Metro as EVP overseeing supply chain and procurement. In February, Brave Toys, the parent company of CONNETIX Tiles, filed a lawsuit against Mastermind Toys, alleging nonpayment of invoices.
