GREENSBORO, N.C. (WGHP) – Taking a cue from its founder’s name, the iconic Toys R Us – you can’t type the R backward – is emerging from its retail tomb.
If you were a fan of the store and spent hours browsing its teeming aisles of games, dolls, puzzles and sports gear, you soon will be able to do so again in Greensboro – just not at the location on Gate City Boulevard (or then High Point Road) that might have lured you or in Winston-Salem, where there once was a store.
Under a new partnership with Macy’s, Geoffrey the Giraffe will stick his neck out once again at the Macy’s in Friendly Center. In fact, by October, Macy’s will devote space in all 400 of its stores to that iconic toy shop.
There also will be stores in Charlotte (two), Durham, Raleigh and Fayetteville, but Greensboro will be the only option in the Piedmont Triad. A spokesperson has said the timetable isn’t certain other than the fall – aka holiday shopping season.
And we also don’t know for sure how much of the store will be devoted to Toys R Us, but reports have said it could be as much as 10,000 square feet or as little as 1,000.
All of that is quite a few notches below the stores so many of us came to know. There had been as many as 800 – some have said 900 – of them across the country before 2017, when the company was forced to file bankruptcy without a plan to emerge (as most businesses would have). There were about 735 at the end, and 15 of them were in North Carolina. Almost all closed immediately, and about 33,000 people lost their jobs.
And that takes us back to the beginning, to the founder, a then-young business entrepreneur named Charles Lazarus. You can see the metaphor. But the death and resurrection of Toys R Us are a remarkable slice of American business history.
How did Toys R Us get started?
Lazarus was 25 and a veteran of World War II who opened a furniture store in Washington, D.C., called Children’s Bargain Town, where he also sold a few toys. About two years later, he expanded into that business, and in 1957 he dumped the baby furniture business and launched his dream, a large toy store, for which he created that iconic name with the flipped R. In 1978 the company started trading on the New York Stock Exchange, and its growth was a two-act play in the evolution of a retail business.
How big did Toys R Us become?
Industry analysts estimated that in 1950, about the time Lazarus was getting going, the toy industry was worth about $500 million. By 1990, that number had grown to $12 billion. By 2001 it was $24 billion. Toys R Us went global, into 1,450 locations – some of which remained open after the closure in the U.S. – and represented about 25% of the world’s toy market. The store sold about 18,000 different toys. It also spun off its brand into Babies R Us (all baby products) and Kids R Us (furniture et al). Geoffrey the Giraffe became the marketing tool in 1973, and we extolled that “I don’t want to grow up, I’m a Toys R Us Kid.” But the store didn’t grow up, either.
What happened to change all of that?
You know the answer to this question. The two killer words that changed retail for all of us: Walmart and computers. Walmart, first, because as that behemoth was likewise growing across America, it – and Target and KMart – began to sell toys. Many toys. And they did so at lower prices than Toys R Us. A Barbie doll or a Lego set or any other iconic item was just cheaper, and that drove traffic. Then came the computer era and online shopping. Toys R Us failed miserably at the e-commerce that was emerging in the 1990s and early 2000s. And it lost market share because children – and their shopping parents – were buying computers and gaming devices that rendered dolls, action figures, games and puzzles as classic but one-dimensional. That flat killed the business model.
What happened with selling online?
Well, Toys R Us tried to do that right and with the partner you would imagine. In 2000 it signed a deal with Amazon that it thought was exclusive, but then Amazon did what it does: It sold toys from other sources, too. They, like Walmart, were cheaper, and Toys R Us’ market share started to decline. And that led to the financial fall. In 2005 investors put together a leveraged buyout of about $6.6 billion to take the business private again. Like happens when you spend too much on your house, the debt payment took away cash needed for improvements and expansion and the development of new revenue. The investors by 2017 had a plan to file bankruptcy and return to life, but CNBC heard about that plan, and when the story broke, the owners had no choice but to expedite bankruptcy before the plan was complete. That’s when almost all the stores closed. A company called Tru Kids acquired the intellectual property in 2018, but the last two Toys R Us stores closed in Paramus, New Jersey, and Houston, Texas, in 2021.
How did this new plan with Macy’s come about?
The Toys R Us brand was sold again in March 2021, and its owner, WHP Global, announced an online sales agreement with Macy’s. And toy sales exploded during the pandemic. Then on Monday the two stores announced their new partnership and reopening plan. Macy’s said in the announcement that toy sales in the first quarter of 2022 were 15 times higher than before it started selling under the Toys R Us brand. The in-store model will be launched at the flagship in Herald Square in New York City, of course, but it also will be in Atlanta, Chicago, Honolulu, Houston, Los Angeles, Miami, San Francisco, San Jose and a second location in New York City. And, yes, coming soon to Greensboro.