Some brands don’t go to heaven when they die. They are reborn in Paramus, New Jersey.
At least that’s the case for the child amusement mega-chain Toys “R” Us, which last year laid off 33,000 workers and closed nearly 900 Toys “R” Us and Babies “R” Us locations across the country. The reanimated corpse of Toys “R” Us marches on, however, having re-emerged from the graveyard of bankruptcy protection earlier this year, under a new parent company, “Tru Kids Brands.”
Tru Kids Brands was created in January 2019 by the lenders who drove Toys “R” Us out of business, first appearing to be a repository for the company’s intellectual property (the lenders cancelled a bankruptcy auction of the IP late last year). After some initial gestures toward an actual relaunch, the new business plan for Toys “R” Us is now clearer: opening a much smaller number of new stores, which are themselves much smaller in physical size and staff head count than the old Toys “R” Us; according to a spokesperson, the plan is to get eight new stores opened by 2020. The digital side of this is complemented by the relaunch of ToysRUS.com, where you can peruse products but are ultimately directed to purchase them at Target, which now runs Toys “R” Us's website with Target's own “toy inventory, digital capabilities and fulfillment options.”
These new stores — the first one opened this past week at the Garden State Plaza mall in Paramus, while the other is opening this week at the Galleria in Houston — are not so much stores, per se, as a three-dimensional catalog of products from brand-name toy companies. They represent in miniature the way that the American economy works now: to replace the business of a broad base of labor paid decent wages and granted benefits with a small taste of of the real thing.
B8ta, the company with which Tru Kid Brands is partnering to open these locations, specializes in setting up custom or pop-up “stores,” which are functionally just heavily designed real-estate for brands that will then pay a fee to have their products stacked on the shelves. Because Toys “R” Us remains the most recognizable brand name among toy stores even after its death, this business model makes for simple math: it can be much better to have Nerf, Lego, or Vtech pay you to stock their wares, rather than the other way around (after all, when Toys “R” Us went under, it owed some $800 million to vendors and other creditors).
The other new wrinkle, as reported by CNBC, is a vast array of cameras and sensors installed in the store, whose data will be used “to monitor traffic patterns and shopper cadence, among other metrics, to give brands and Tru Kids feedback on how the spaces are performing.” Sketchy as this may seem, these have tools and methods have become fairly common in retail, and you can find similar examples at other big-name stores.
So beyond the allure of the Toys “R” Us name and the promise of “shopper cadence” data, what is it that makes these brands want to pay to be in the store? I drove to Garden State Plaza, perhaps the second-most important mall of my youth (after the Willowbrook Mall in nearby Wayne, where Toys “R” Us was formerly headquartered), to investigate.
The store was fairly packed when I visited on Thursday, but not so much that you couldn’t move around. Whereas a Toys “R” Us of yore was cavernous and Costco-sized, the new digs are smaller. There’s a big, goofy treehouse in the middle of the store, and an activities area with a schedule full of readings, playtime, and branded partnerships (“8:00 pm — Hasbro Family Fun”).
The employees with whom I tried to speak declined to talk to me, referring me to a company spokesman. Given that I showed up during school hours, there weren’t too many kids around, but there were plenty of families, couples, and unaccompanied parents milling around the place to do some holiday shopping. Among the people with whom I spoke, I encountered mixed reviews of the space.
Tony, a twenty-something originally from northern New Jersey, walked into the store and loudly declared, “this doesn’t look right at all.” When I went over to ask him about what he meant, he elaborated: “It doesn’t look like Toys “R” Us at all. It’s too boxed in, it doesn’t make sense, how can kids run around? I grew up with Toys “R” Us, so it’s important to me.”
Daniella Cooney, a former toy shop owner on New York City’s Upper East Side, said that while she really liked the “interactive” component, she would have preferred something a “little less commercial.”
Pearl, a grandmother from Paramus who visited with her daughter and grandchild, told me that the store was “terrific!” before I could finish asking my question. Lisa, a mother from nearby Ridgewood, told me she liked the new location a lot as she pushed a double stroller through it.
“There aren’t many places where you can touch toys these days, and I like the interactive stuff,” she said. “And I also like that there’s a different staff, that seems like they want to be there.”
Though Lisa may not have known it, plenty of Toys “R” Us staffers would love to be there, provided they got the chance. After Toys “R” Us was bought out in 2005 by the private equity firms Bain Capital and Kravis Kohlberg Roberts and the real-estate investor Vornado Realty Trust, the company assumed a staggering debt load that eventually sunk it. As late as 2016, according to The Atlantic, Toys “R” Us “was still paying interest on loans it got from KKR and Bain,” with one estimate suggesting that “the money KKR and Bain partners earned from those fees more than covered the firms’ losses in the deal.”
Ann Marie Reinhart Smith is a North Carolinian who worked at Toys “R” Us for 30 years, and was among those laid off last year. She told me that she still hasn’t found full-time work since the layoffs (“I’m 60, I was planning for retirement, and I had to create a new resume”), and that she only got health insurance in January through her husband’s job. Though Bain and KKR set up a $20 million severance fund a year ago for laid off employees, the per-person amount paid out to laid off employees came out to less than what they would have been paid otherwise had the company not been driven into bankruptcy. This past summer, Reinhart and other former Toys “R” Us employees won a $2 million severance settlement with the company, which they took to be a small, mostly symbolic victory. The payouts amounted to around $20 for part-time workers and $40 for full-time workers, or “dinner for one and dinner for two at Applebee’s,” as Reinhart put it.
Though Reinhart says that she and her former coworkers are inspired by recent victories they have won — a number of former Toys “R” Us employees now sit on a “mirror board” of the Tru Kids leadership, a concession to the organizing done by former Toys “R” Us workers — the company’s relaunch has left a bad taste in Reinhart’s mouth. “Close to 20 former Toys “R” Us and Babies “R” Us employees have been hired across the two new Toys “R” Us stores,” according to a spokesperson for Tru Kids; for context, 33,000 Toy “R” Us employees lost their jobs when the company shut down its stores last year.
“It’s a slap in the face to see them open the store,” Reinhart said. “‘Oh Geoffrey’s back!,’” she added sarcastically, referring to the company's giraffe mascot. “Yeah, we're not feeling it.”
