Parent of Toys R Us teams with Target for online sales

Analysts question Tru Kids’ decision to outsource to a rival.

NEWYORK— The parent company of Toys R Us is turn- ing to a key rival to restart its e-commerce business ahead of the holiday shop- ping season.

Tru Kids Brands is team- ing up with discounter Target Corp. to relaunch Toys- rus.com, according to a joint release.

The site, which launched Tuesday, features product rev iews and v id e os and directs browsers to a buy button at Target.com to complete the purchase.

Target and Tru Kids declined to share details of the financial terms. But while analysts say the move is a big win for Target’s toy business, they question why Toys R Us’ parent company would decide to outsource e-commerce to a third party.

The move comes as the first two new Toys R Us stores — one in Houston, the other in Paramus, New Jersey — will open in November as part of a small comeback of the defunct iconic toy chain in the U.S. Target.com will also handle online sales in those two stores.

Reta i lers in c luding Walmart, Party City, and Target have been competing for sales left on the table after Toys R Us filed for bankruptcy and liqui- dated in March 2018. But Target has been one of the most aggressive. Last Octo- ber, it devoted extra space at 500 locations near former Toys R Us stores to feature a bigger selection and larger toys like playhouses.

Neil Saunders, managing director at GlobalData Retail, says the Tru Kids’ deal with Target helps the Minneapo- lis-based discounter bolster its already strong toy sales. But it also helps Toys R Us hand off the complex issues of fulfillment. Still, he says the deal “raises a lot of questions on Toys R Us’ future.”

“It’s a neat solution but not an ideal solution,” said Saunders. “It’s ceding control to another competitor.”

Jason Goldberg, chief commerce strategy officer of Publicis Communications, agrees. “If True Brands was truly trying to rebuild a sustainable toys business, they would never want to outsource their e-commerce to a third party and certainly not to a rival,” he said. “Sadly this is probably a sign that the current Tru Kids efforts are a shallow effort to monetize a brand they own, rather than an effort to build a serious toy competitor.”

He recalled the huge mistake Target and Toys R Us made when they outsourced their online operations to Amazon in the early days of e-commerce.

Tru Kids is working with other partners in staging its modest return.