Toys R Us is back in the toy game.
Toys R Us opened its first new U.S. retail store at the Westfield Garden State Plaza mall in Paramus, N.J., Wednesday. The store looks way different than an old school Toys R Us, featuring interactive shops in partnership with top brands Hasbro, Lego and MGA Entertainment.
Tru Kids CEO Richard Barry — Toys R Us’ former long-time chief merchant — tells Yahoo Finance the store has opened strongly with high levels of foot traffic.
Recall the company went through a highly publicized bankruptcy liquidation in 2017 after years of struggles and tough competition from Amazon and Walmart. But Barry bought the rights to the brand name and houses it under the corporate name called Tru Kids. He has since struck a deal with Target to help service orders from a rebooted website.
Yahoo Finance caught up with Barry, who was in the New Jersey store at the time of the interview. What follows is an edited and condensed version of the chat.
Yahoo Finance: Long road to get to this store opening?
Barry: It’s a dream come true for me personally, I have been around the company for decades. There are not many times when you can make a brand that has got such an incredible emotional connection like Toys R Us — a classic American brand —and have the opportunity to reimagine it and bring it back. I feel very humbled by being given that role to do that and I think we are executing in some interesting and different ways.
The old playbook would have been put up stores and run e-commerce off that. We decided to go down a path of working through partnerships and really building relationships to help bring back the Toys R Us brand.
Yahoo Finance: How hard has it been to rebuild relationships with toymakers considering what happened with the bankruptcy and liquidation?
Barry: We have to work hard with all of our partners on a couple of issues. One, clearly there were many, many folks — our historical partners — that were harmed by the bankruptcy. So we have to recognize that and really make sure when we think about our new business we are building a great model for them to really position their brands in store or online. Also the business model we are presenting, the retail as a service is a foundation. That means brands are investing in space in the stores. And then we partner together to build out these awesome brand shops. We work with them on what the experience looks like, the assortment and signage and the training of the employees.
The vast majority of our partners welcomed us back with open arms because they recognize the value we have historically brought to their brands. They recognize they can execute their brands at Toys R Us in a way they can’t at other retailers. For that reason and the fact that many of our partners grew up and built their businesses as Toys R Us grew back in the 70s, 80s and 90s our partners remember that. And they have been very good to us.
Yahoo Finance: What does success look like for you with this reboot? Hundreds of stores in a few years?
Barry: We will learn a lot out of our first two stores on what works and doesn’t work. We can then tweak things and change over time. Our operating plan today has us opening up to 10 stores by the end of 2020. We are looking at real estate right now. We obviously have these physical locations, but remember we also have Toys R Us online where people can shop.
We do intend to open more stores. But we will do it in a very thoughtful manner. The locations we have chosen this time around are smaller locations, about 6,500 square feet. A typical Toys R Us store was about 50,000 square feet. And location is really important. We are in some of the best shopping malls in the country and in the best locations in the mall.
Yahoo Finance: How big is the opportunity for a retailer that just sells toys?
Barry: Judging by the feedback we are seeing from customers walking into our first store today, there is 100% a place for a dedicated specialty expert in the toy space. That’s the space we want to grow into over the weeks and years ahead. There is not really another place where you can experience brands executed in the way we are delivering here. And that means there is a massive opportunity for us as we move forward.
Yahoo Finance: What are some of the hot toys this holiday season?
Barry: There are a ton of great trends in the industry right now. Obviously a big box office for Frozen is really helping to drive those sales. That’s very exciting. Star Wars is selling well. An interesting hot seller is Juno from Spin Master. It’s an incredibly animated elephant. It’s doing really well. We are also seeing a lot of classic products doing really well this year. Play-Doh is having a renaissance. Barbie and Hot Wheels are doing very well.