Toys “R” Us is scrambling to open 120 new stores by Thanksgiving — but suppliers burned by its devastating bankruptcy in 2017 remain skittish about doing business with the retailer’s new operators, The Post has learned.
Go Retail Group — a Texas-based business that specializes in pop-up stores, including two Disney Store Limited Time locations and Calendar.com shops — has has opened 40 year-round Toys “R” Us stores since 2024. It has opened the stores under license from WHP Global, a New York-based firm that owns 16 brands including Vera Wang, Marc Jacobs, Anne Klein and Land’s End.
But as Go Retail looks to quadruple its number of Toys “R” Us locations in time for the crucial holiday season, it has been asking toy manufacturers for extended credit terms – asking to pay as much as 180 days after goods are delivered to its stores, multiple sources told The Post.
In response, many vendors have pushed back, with some noting that the industry norm for inventory financing is between 30 and 90 days.
“They should be the ones financing the business, not their vendors,” said Jay Foreman, chief executive of Basic Fun, maker of Tonka Trucks and Care Bears. “We went down that road once before and got badly burned and won’t put ourselves in that position again.”
Alan Dorfman of Super Impulse — which makes tiny, pocket-sized versions of toys and games including board games like Battleship, Connect 4 and Hungry Hungry Hippos — is also holding back.
“We hope to be part of it, but we are not yet shipping to them,” Dorfman told The Post. “We have worked with Go Retail in the past but there were some bumps in the road and we are trying to get things back on track.”
Founded 70 years ago by Charles Lazarus, the retailer operated more than 800 Toys “R” Us and Babies “R” Us stores in the US when it went belly up and liquidated in 2018. It was saddled with $5 billion in debt after being acquired by private equity giants Bain Capital, KKR and Vornado Realty Trust in 2005.
The implosion sparked millions of dollars in losses and years of chaos across the US toy supply chain. It also left longstanding bitterness among industry veterans.
Nevertheless, WHP Global has tapped Jamie Uitdenhowen, Toys “R” Us’s former vice president of merchandising, as executive vice president of the revived brand. Matthew Finigan, who had served as the company’s treasurer before the bankruptcy, is now the brand’s chief financial officer.
“There’s hesitation to do business with them because of the terms they are asking for,” said Michael Drake who headed up boys toys at Toys “R” Us headquarters in Paramus under Lazarus and says he has spoken with a dozen toymakers.
WHP acquired the brand in 2021 and launched partnerships with Macy’s and Go Retail among other smaller tie-ins. It has licensing partnerships abroad that operate some 1,680 stores in 37 countries.
“Like any retailer, we work to secure the best possible terms with our suppliers,” Go Retail CEO Gideon Schlessinger said in a statement. “We’ve been in the toy business for 26 years, managing significant seasonal inventory commitments and building longstanding vendor relationships. Our approach to purchasing and payment arrangements has been consistent throughout our history and remains unchanged today.”
In addition to Macy’s, there are some 40 Toys “R” Us stores opened in the US over the the past several years. A 20,000-square-foot flagship at American Dream mall in East Rutherford, NJ is run by a licensing partner called Parade Stores Inc., a Toys “R” Us spokesperson said.
Go Retail operates all of the other freestanding locations, including the additional 120 stores that are mostly opening in malls for about one year, a spokesperson for the company told The Post.
“We have not experienced any hesitation from suppliers about working with us under the Toys “R” Us brand,” Schlessinger said. “In fact, the strength and growth of Toys “R” Us have only enhanced those relationships.”
The store expansion comes as the $46 billion US toy industry is on an upswing with sales growing by 17% in the first half of the year — or the biggest such increase in six years, according to Circana. In its heyday, Toys “R” Us was the place where the industry launched new products, showcased the latest trends and allowed families to interact with the toys they might purchase.
Still, some question the retailer’s relevance today as rivals like Walmart, Target, Amazon and Five Below have expanded their toy offerings.
“It’s a tougher landscape for them to come back to,” said toy analyst Gerrick Johnson of Seaport Research. “Because others have stepped into the void they left.”
Before the bankruptcy, most Toys “R” Us stores were about 30,000 square feet, compared with the Go Retail stores that are between 3,500 to 7,000 square feet, say industry experts.
“The 120 mall pop ups won’t do the volume of even 20 Walmart stores,” predicted Foreman of Basic Fun.
Tom Neville, vice president of sales for Connetix, an Australian-based company that makes colorful, magnetic tiles, said he was surprised to learn from The Post that Toys “R” Us was already selling his company’s products online.
“They are definitely not buying directly from us,” Neville told The Post, adding that he guessed ToysRUs.com purchased Connetix from a distributor.
Neville said he had deliberately “stayed an arm’s length” from the toy departments at Macy’s that are branded Toys “R” Us, of which there more than 350, according to Macy’s.
“Most of the time you go into a Macy’s [toy department] and it’s sad,” Neville said. “It’s not merchandised well. The shelves are empty off season.”
Macy’s declined to comment on its toy offerings. The company has since closed dozens of stores since the partnership began in 2022.
Others are still on the fence about partnering with Toys “R” Us.
“I’ve been wondering whether the [new operators] are going to make this unique and bring in something new and different from what you can find on Amazon,” said Brian McDonald, vice president of sales and marketing for Ohio-based Simplay3, maker of outdoor activity sets and toys.
Simplay3 is open to working with Toys “R” Us, McDonald said, “but we got burned pretty good [by the bankruptcy], losing nearly $1 million and we would definitely be more cautious because of who they are.”
At the same time, “there’s also fear about missing out on an opportunity,” added Drake, the former Toys “R” Us executive.