Farewell Toys R Us, We Will Miss You

Posted on March 12, 2018 at 12:59 PM by Kamiron Walters

The latest headlines aren’t looking good for the toy industry, or the real estate industry for that matter.

Some companies (think Amazon, Walmart and Target, namely) are expected to benefit from the demise of Toys R Us, but it looks like a staple shop of my children’s lives could soon be nothing but a fond memory. And that’s going to leave big gaps in the world of commercial real estate.

Toys R Us filed for bankruptcy protection last September, which initially rattled some feathers, but we all believed a restructuring was looming. At first, Toys R Us said it aimed to keep its store fleet as much of the same as possible.

Store closures weren’t the goal, management cooled shoppers’ worries. But then, early this year, Toys R Us announced it would move forward with closing roughly 180 stores of its 800 locations in the U.S. (Toys R Us also has big operations in the U.K., which it’s been winding down.)

With those 100-plus liquidation sales already kicking off, last week reports surfaced that Toys R Us was considering closing the remainder of its stores. The announcement could come as soon as Monday, according to sources who spoke with The Wall Street Journal.

There are obvious implications for the toy industry if this plays out as we might expect. Shares of Hasbro and Mattel, for example, tumbled last week on the news.

But I want to dive into the implications, which maybe aren’t quite as clear, for commercial real estate.

Toys R Us’ roughly 800 stores are a lot of big boxes, some under the Babies R Us name, some are outlets in malls, but many are located within strip centers.

For more details: forbes.com