Toys R Us is officially back from the dead, but its new stores won't actually make any money selling toys
- Two Toys R Us stores are opening in high-end malls in time for 2019 holiday shopping.
- Toys R Us's parent company Tru Kids won't make any money from the sale of toys, with manufacturers paying for space and services and keeping 100% of sales.
- Tru Kids and experiential retailer b8ta plan to open up to 10 more Toys R Us locations in 2020.
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Toys R Us is back from the dead.
Tru Kids, the company created in February that controls the Toys R Us and Babies R Us brands, is opening two new Toys R Us stores for the 2019 holiday season. Tru Kids announced on Wednesday that the two stores will be open in high-end malls: The Galleria in Houston, Texas and in Westfield Garden State Plaza in Paramus, New Jersey.The stores will be smaller than Toys R Us of years past, at roughly 6,500 square feet, with a "playground-like environment," according to a press statement.
While toys will be available for purchase, all sales will go directly to manufacturers, without Tru Kids acting as a middle man. Instead, the company will make money from manufacturers paying a fee to sell goods in Toys R Us locations.
"We don't make any money off of the sale of the goods," Phillip Raub told Business Insider.
Raub is the cofounder and president of B8ta, an experiential retailer that entered into a joint venture with Tru Kids to open the Toys R Us stores. The new Toys R Us stores will follow B8ta's business model, marketing themselves as an appealing spot for manufacturers by offering tech, data, and insights, as well as high-traffic locations in malls and other busy urban centers.
"What B8ta is bringing to the table is going to be our B8ta business model, really thinking kind of more subscription based, placement within the stores, being able to provide rich data analytics for makers," Raub said.Customers will be able to see and interact with every toy for sale in the store, which be from both large name brands as well as smaller companies. Kiosks available in stores will allow customers to order from a wider assortment of products online.
Tru Kids and b8ta plan to open up to 10 more Toys R Us locations in 2020, using a slightly larger format of around 10,000 square feet. Richard Barry, CEO of Tru Kids Brands and Toys R Us' former CMO, said the company is anticipating it could take "some education" for customers to get used to the new format.
"But we believe that the new elements of the store that we've added are so overwhelmingly positive that customers are going to love it," Barry added.