Toys R Us May Survive in Canada: Here’s Why

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The shutdown of Toys R Us was a sad day for lovers of the retail store who loyally purchased toys for decades. While the stores have inevitably closed their doors in the United States, those still operating in Canada may survive as they snagged a highly-qualified and interested bidder who resurrected the toy brand and has helped it continue to reach high success in the industry.

Catching the Eye of the Right Investor

As the bankruptcy played out, Toys R Us caught the eye of publicly traded Canadian investor Fairfax Financial Holdings who submitted a $300 million bid to purchase all of the retailer’s locations in Canada out of bankruptcy, according to the Wall Street Journal.

Currently, Toys R Us has made it through nearly a year of bankruptcy protection. With more than $1 billion a year in sales, the Canadian Toys R Us stores are showing a track record of sales gains and earnings before interest, tax, depreciation, and amortization of more than $100 million per year for the past nine years.

Why is Toys R Us Canada Successful?

The success of Toys R Us Canada is incredible simply because it has thrived while operating with a largely aging repertoire of big-box retail stores, which has now been outdone because of the endless aisles the internet now offers. The big-box store stigma has yet to hinder Toys R Us in Canada thanks to events they host in store to bring in customers and interact with them in a highly engaging way. An example is the “Make and Take” event they host where children can put together toys and take home a small item like a poster.

Toys R Us is Taking on a New Look

With Fairfax as a partner, Toys R Us is spending more than $10 million to renovate all of its stores, with more than 40 refreshed locations to completed by the end of last summer. Upgrades to the store include lowered shelving, grouping toys by age, stage and play pattern as opposed to brand and adding interacting and engaging play areas and resting areas for parents. The stores also introduced mobile pay and reconfigured checkout areas to make the payment processing faster and online pickups more streamlined.

What is the Future of Toys R Us Canada?

In the future, Toys R Us is interested in partnering with a food service provider, hosting in-store birthday parties and themed events to promote workshops in child development, science and learning, and fitness. There a few pilots being tested to see how these concepts will fare in the store.

Toys R Us Canada is currently No. 2 in toy sales just falling behind Wal-Mart Canada Corp. The toy industry is continuing to grow despite industry worries. According to NPD, the Canadian toy market has been growing by nearly $100 million on average every year since it began tracking it in 2014 when the market has a $1.7 billion price tag. Sales increased three percent last year to $2 billion.

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