In time for the holiday shopping season, WHP Global and Macy’s Inc. plan to put a Toys R Us shop inside every Macy’s store by Oct. 15.
According to Macy’s, the in-store shops will range from 1,000 square feet for smaller shops to 10,000 square feet for “flagship” locations in Atlanta, Chicago, Honolulu, Houston, Los Angeles, Miami, New York and San Francisco. The department store chain says the footprint of each Toys R Us shop might “flex up” an additional 500 to 3,000 square feet during the holiday season, according to a statement from Macy’s.
Macy’s did not immediately respond to a request for further details.
Since buying the Toys R Us brand in early 2021, WHP has worked to re-establish the brand’s physical and online presence. In August 2021, Macy’s and WHP launched a strategic partnership to bring Toys R Us shops to 400 Macy’s stores nationwide. In addition, ToysRUs.com became part of the Macy’s online ecosystem.
Macy’s, with 511 locations, is the largest retail brand owned by Macy’s Inc. (No. 16 in the 2022 Digital Commerce 360 Top 1000). Macy’s also owns the Bloomingdale’s department store chain and the Bluemercury cosmetics brand.
When shoppers go to a product detail page on ToysRUs.com and click “Buy Now,” the site redirects them to purchase from Macys.com. Macy’s makes the same toy selection available at macys.com/toysrus.
What’s the long-term vision?
By working with Toys R Us, Macy’s is betting its toy selection will bring shoppers into stores. It’s also diving deeper into an online category that grew a bit faster last year than overall ecommerce. According to Digital Commerce 360 data, sales for the 50 toy and hobby e-retailers ranked in the 2022 Digital Commerce 360 Top 1000 rose 19.3% in 2021, compared with 15.7% for the whole Top 1000.
Melissa Minkow, director of retail strategy at ecommerce technology vendor CI&T, says the Macy’s and Toys R Us partnership “strategically leverages consumers’ desires for experiential in-store retail,” but is skeptical about whether it will produce long-term results.
“If Macy’s ultimately maintains this store-within-a-store past holiday shopping timing, there will need to be a big-picture vision for the future of this partnership,” Minkow says. “No matter how strong the sales lift, if it’s only for a few months, that’s not enough to fix both brands’ history of losses.”
Trying to make a comeback
Like many well-known brands in bankruptcy, Toys R Us gained a second life when Tru Kids Inc., an entity owned by creditors, bought its intellectual property. Tru Kids had its own store strategy but closed its two U.S. locations in 2021. Oaktree Capital-backed WHP Global then bought a controlling interest
Once a dominant toy retailer, Toys R Us filed for bankruptcy in 2017. Since then, the retailer has changed ownership twice. It partnered with Target Corp. (No. 5 in the Top 1000) and Amazon.com Inc. (No. 1) before WHP later struck its deal with Macy’s to help it make a comeback.
In December 2021, WHP launched the first physical Toys R Us store in the United States since the original company liquidated itself in 2018. The new location is a 20,000-square-foot, two-story store at the massive American Dream entertainment and retail center in East Rutherford, New Jersey. That puts the new store steps away from the mall’s kid-friendly Nickelodeon Universe Theme Park and DreamWorks Water Park.
WHP says Toys R Us operates more than 900 stores and ecommerce sites in 25 countries outside the U.S.
Bloomberg News contributed to this report.
Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.