Geoffrey the giraffe is seen on the side of a Toys “R” Us truck on March 17, 2005 in Colma, California.
Justin Sullivan | Getty images
Toys R Us has a new owner.
The brand management company WHP Global announced on Monday that it has acquired a majority stake in Tru Kids, the parent company of the Toys R Us, Babies R Us and Geoffrey the Giraffe brands.
“We are in the brand business and Toys R Us is the most credible, trusted and loved toy brand in the world,” said Yehuda Shmidman, WHP Chairman and CEO, in an interview. “We come from a year when toys are just on fire … And for Toys R Us, the US is really a blank canvas.”
Shmidman has served as Vice Chairman of Tru Kids since 2019. Tru Kids, which is backed by Solus Alternative Asset Management and funds managed by private equity group Ares Management, bought the Toys R Us brands and intellectual property after filing for Chapter 11 bankruptcy protection in September 2017. Toys R Us was ultimately unable to emerge from bankruptcy on its own after a crippling holiday spell in 2017 that led to bankruptcy.
Tru Kids has since tried a number of strategies to kick start the momentum, including opening two pop-up locations in the United States with the help of tech platform b8ta. But they closed earlier this year due to poor shopping center traffic, which was mostly suppressed during the Covid pandemic. For a period of time, the big-box retailer Target has powered the Toys R Us website. Currently, all purchases on ToysRUs.com are forwarded to Amazon.
“The restructuring took a major toll on the company,” said Shmidman. And then Covid is hopefully once in a century. But now we get past those two things. And the sky is the limit. ‘
Going forward, WHP said it will lead the global Tru Kids business and guide its expansion. Toys R Us and Babies R Us together have more than 900 branded stores in more than 25 countries – in parts of Europe, Asia, Africa, Australia and the Middle East.
In North America, Shmidman said the plan is to reopen Toys R Us stores – ideally some before this holiday season. He said this could come in a variety of formats: flagships, pop-ups, airport locations, or mini-stores in other retailers’ stores. WHP has not yet set a number for the number of locations it plans to open in the US.
“There are so many malls out there that won’t be around in the future, so we don’t need to be there,” said Shmidman. “But we could be in malls with traffic… So we really have a chance to capture that experience not only for toys that people crave, but also capture what [people] want to shop. That will be very interesting after Covid. “
WHP is backed by a $ 350 million equity commitment from funds managed by Oaktree Capital Management.
Financial terms of the deal have not been disclosed.