Geoffrey the Giraffe is seen on the side of a Toys “R” Us truck March 17, 2005 in Colma, California.
Justin Sullivan | Getty Images
Toys R Us has a new owner — again.
The brand management company WHP Global announced Monday it has acquired a controlling interest in Tru Kids, the parent company of the Toys R Us, Babies R Us and Geoffrey the Giraffe brands.
“We’re in the brand business, and Toys R Us is the single most credible, trusted and beloved toy brand in the world,” Yehuda Shmidman, chairman and chief executive officer of WHP, said in an interview. “We’re coming off a year where toys are just on fire. … And for Toys R Us, the U.S. is really a blank canvas.”
Shmidman has been serving as vice chair of Tru Kids since 2019. Tru Kids, which is backed by Solus Alternative Asset Management and funds managed by private equity group Ares Management, bought the brands and intellectual property from Toys R Us after it filed for Chapter 11 bankruptcy protection in September 2017. Toys R Us was ultimately unable to emerge from bankruptcy on its own following a crippling 2017 holiday season, pushing it into liquidation.
Tru Kids has tried a number of strategies to stir up momentum since, including opening two pop-up locations in the United States with help from tech platform b8ta. But those closed earlier this year due to poor mall traffic, which has been especially suppressed during the Covid pandemic. For a period of time, big-box retailer Target powered Toys R Us’ website. Currently, all purchases on ToysRUs.com are redirected to Amazon.
“The restructurings took a big toll on the company,” Shmidman said. “And then Covid is, hopefully, once in a century. But now we’re getting past those two things. And the sky’s the limit.”
Going forward, WHP said it will be managing the global Tru Kids business, and guide its expansion. Toys R Us and Babies R Us together have over 900 branded stores in more than 25 countries — in parts of Europe, Asia, Africa, Australia and the Middle East.
In North America, Shmidman said the plan is to open Toys R Us stores, again — ideally a number ahead of this holiday season. He said this could come in various formats: flagships, pop-ups, airport locations or mini stores inside other retailers’ shops. WHP hasn’t yet set a number for how many locations it plans to open in the U.S.
“There are so many malls that will no longer be in the future, so we don’t need to be there,” Shmidman said. “But we could be in malls that do have traffic. … So we really have an opportunity not just to capture that experience for toys that people are yearning for, but also capture where [people] want to shop. That will be very interesting post-Covid.”
WHP is backed by a $350 million equity commitment from funds managed by Oaktree Capital Management.
Financial terms of the deal were not disclosed.