Ontario-based Putman to buy Toys ‘R’ Us, with plans for overhaul

Toys “R” Us and Babies “R” Us Canada are getting a new owner, who is already full of ideas for how to revamp the retailer.

Putman Investments said Thursday that it will purchase the Vaughan Ont.based brand and its 81 toy and children’s stores from affiliates of Fairfax Financial Holdings Ltd.

The company didn’t reveal the deal’s value, but Fairfax chief executive Prem Watsa said in a statement that his company will benefit from a continuing royalty stream and keep the real estate it acquired when buying the retailer for $300 million in 2018 from its U.S. parent, which had filed for bankruptcy protection.

Doug Putman, who runs the familyowned and Ancaster, Ont.-based investment firm, said he pursued the deal because he felt Toys “R” Us and Babies “R” Us Canada were a “fantastic fit” for his company given his experience overhauling iconic retailers.

“We love buying businesses that we feel are undervalued. We love a good turnaround,” he said. “We definitely think that there’s a lot more growth and opportunity with Toys “R” Us.”

Putman Investments owns Sunrise Records and Entertainment Ltd. and HMV. Last year, it purchased recently closed Davids Tea locations to turn into locations for its T. Kettle tea chain.

The company has leaned on the nostalgia people have for the brands it has acquired, but has also expanded into new product categories and worked on bringing a sense of discovery and excitement to the stores.

When Putman looked at Toys “R” Us and Babies “R” Us, he saw great products and enthusiastic staff, but thought the stores “need to get more fun” and become more of an experience for kids.

When the U.S. entity was struggling, Toys “R” Us Canada unveiled a plan to add benches to play areas, where children can test new products or take part in crafts and games.

Former Toys “R” Us president Melanie Teed-Murch also considered allowing birthday parties at stores, opening smaller locations and exploring food and beverage integrations.

Putman appears to have similar ideas. “We’ve got this list of 100 really great ideas, whether it’s birthday parties or a place to eat or … because we own T. Kettle, do you do something where kids can come in and have tea with a princess or some of the other characters?” he said.

“I think there’s lots of options.”

Though his deal to buy Toys “R” Us hasn’t closed yet, Putman expects it to wrap “quickly” and is already willing to make one promise: the retailer’s giraffe mascot Geoffrey isn’t going anywhere.

“I think 100 per cent, Geoffrey sticks around.”