Toys R Us kids rejoice as store opens here
Retailer gets a second life with new spot in the Galleria
Toys R Us, the beloved toy retailer that went out of business last year, has returned to Houston with a revamped store that aims to offer a more interactive shopping experience than its failed predecessors.
Customers at the new Toys R Us, which opens Saturday at the Galleria, will be greeted by corporate mascot Geoffrey and encouraged to take a selfie with the iconic giraffe. Children can climb a nearby treehouse overlooking a reading nook with artificial grass, small benches and bookshelves. Toward the back of the store is a theater that can host birthday parties and toy events, as well as an interactive “Magic Mirror” screen displaying a digital Geoffrey that mimics children’s movements.
Kids are encouraged to play with toys throughout the store and can ask staff to open and demonstrate any product. There’s a sandbox filled with claylike Kinetic Sand, a Nerf blaster target range and a Cra-Z-Art studio where kids can make slime. Social media photo opportunities abound with popular characters from “PAW Patrol,” Nintendo’s Super Mario and “Star Wars,” including Stormtrooper Captain Phasma made entirely out of Legos.
“We spent a lot of time making sure this store was experiential from the moment you walk in,” TRU Kids Chief Executive Richard Barry said. “TV commercials, packaging and signs can only go so far. We have to bring
toys to life.”
TRU Kids, a Parsippany, N.J., company led by former Toys R Us executives, aims to breathe a second life into the 62-year-old toy retailer, which, crushed by billions of dollars of private equity debt, filed for bankruptcy in 2017 and went out of business early last year. The liquidation claimed 735 Toys R Us and Babies R Us stores nationally, including 18 locations in the Houston area.
Before it failed, Toys R Us had annual revenue of $1.3 billion, accounting for 5 percent of the U.S. toy market.
The toy industry struggled after the bankruptcy. The last holiday season — the first without Toys R Us — snapped a four-year streak of soaring toy sales, ending the year down 2 percent to $21.6 billion, according to the NPD Group, a toy market research group.
While many big-box retailers expanded their toy sections around the holidays, toymakers such as Mattel of El Segundo, Calif., and Hasbro of Pawtucket, R.I., need a dedicated retailer pushing product throughout the year, said Charlie O’Shea, lead retail analyst with Moody’s Investor Service, a credit rating firm.
“Toys R Us was the place to go in August for a birthday present,” O’Shea said.
‘A lot of affection’
TRU Kids, which acquired Toys R Us’ intellectual property out of bankruptcy last year, plans to open 10 stores nationally by the end of 2020. The company last week opened its first store inside the Westfield Garden State Plaza mall in northern New Jersey. Hundreds of Toys R Us aficionados, some of whom drove from across the tri-state area, waited in lines for hours to get into the store during its grand opening last Saturday. Executives expect a similar reaction for the grand opening of its second store in Houston .
“There’s still a lot of affection for the brand,” Barry said. “Toys have this emotional element. People remember buying bikes and Christmas toys here. The heart-strings get pulled.”
TRU Kids chose to relaunch its brick-and-mortar operations in Houston because of the strength of the Galleria, which attracts more than 30 million visitors a year. In fact, Toys R Us, which for years eschewed malls in favor of freestanding stores, plans to open new locations primarily in high-performing malls.
“They ignored the mall and left a lot of traffic on the table,” O’Shea with Moody’s said.
A smaller size
The Houston store — at 6,473 square feet — is smaller than the old Toys R Us locations, which averaged around 40,000 square feet. It carries only about 1,500 of the best-selling toys nationally, such as LOL Surprise, Baby Shark and merchandise from popular movie franchises such as “Frozen.”
TRU Kids makes no profit from the vast majority of toys sold in its stores, instead making money by charging toymakers to lease shelf and floor space. The company also collects royalties from partners operating some 700 international stores outside the U.S. The goal is to capitalize on Toys R Us’ brand recognition, Barry said.
The company worked with Seattle architecture firm CallisonRTKL to modernize Toys R Us stores while keeping its heritage intact. The stores, which will range in size from 6,500 square feet to 10,000 square feet, boast a bevy of technologies, including mobile checkout registers, overhead cameras that monitor customer traffic and kiosks that allow shoppers to purchase out-ofstock toys online.
The stores also feature traditional design elements, such as wood, which hark back to the retailer’s iconic wood slat signage, as well as the same colors and fonts that Toys R Us fans will instantly recognize.
TRU Kids earlier this year relaunched its website, which features toy trend and DIY videos, such as how to make a photo frame using Lego pieces. The retailer offers 15,000 toys online, fulfilled through a partnership with Target.
Barry, who started at Toys R Us in 1985 as a store employee in Cardiff, Wales, and worked his way up to become its chief merchandising officer before its collapse last year, said the bankruptcy was a humbling experience, but one that afforded the company a clean slate to reimagine the toy store of the future. The company plans to expand slowly, ensuring each store offers an shopping experience that can’t be found elsewhere, he said.
“We’re not in a rush to grow,” Barry said. “We want to do it in a responsible way.”