Toronto Star

Toys ‘R’ Us Canada to get new ownership

Investment firm says brand is undervalue­d, has room to grow

- TARA DESCHAMPS

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 family owned 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 in Canada, so I think we’re excited to take on the challenge and start growing the business again.”

Putman Investment­s owns Sunrise Records and Entertainm­ent Ltd. and HMV. Last year, it purchased recently closed DavidsTea 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 when turning them around, 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. “We’ve got to look at everything through the eyes of a child,” he said.

The Toys “R” Us Canada that Putman will take over has spent the past few years tweaking its locations and products and exploring new revenue streams.

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 families to throw birthday parties at stores, opening smaller locations and exploring food and beverage integratio­ns.

While not all those plans came to fruition, 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 out there for us.”

But there’s a lot of competitio­n for their attention and pressure facing toy companies these days. Video and online games have exploded in popularity, Mastermind Toys stores has expanded rapidly and online giants Amazon and eBay have become popular toy retailers, too.

The changes were among the factors contributi­ng to Toys “R” Us in the U.S. filing for bankruptcy in 2017.

The U.S. chain, which has long been a separate entity from Toys “R” Us Canada, has since been staging a comeback and announced plans recently to begin opening as many as 400 locations inside Macy’s department stores next year.

Neither the U.S. troubles nor the COVID-19 pandemic, which closed retailers for lengthy periods of time over the past two years, were enough to deter Putman.

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

“I brought my two-year-old in and when Geoffrey the giraffe came out, she was just stunned. For weeks later, it was like, ‘Can we go see Geoffrey? Where’s Geoffrey?” he said.

“You can’t get rid of Geoffrey.”

 ?? JEENAH MOON BLOOMBERG FILE PHOTO ?? Putman Investment­s said Thursday that it will purchase Toys “R” Us and Babies “R” Us Canada and its 81 stores from affiliates of Fairfax Financial Holdings Ltd.
JEENAH MOON BLOOMBERG FILE PHOTO Putman Investment­s said Thursday that it will purchase Toys “R” Us and Babies “R” Us Canada and its 81 stores from affiliates of Fairfax Financial Holdings Ltd.

Newspapers in English

Newspapers from Canada