Billions of dollars in toy sales are being carefully re-deployed after the hedge funds that owned Toys “R” Us determined that the toy company was more valuable to them dead rather than alive, forcing liquidation and disallowing the company bankruptcy protection.
This will be the first holiday season without Toys “R” Us stores, with their huge selection of toys, since the holiday season of 1948. Think about it – Baby Boomers grew up with the ability to go shopping with parents in the stores; as did GenXers and Millennials. Three generations that now have to find other ways to source the toys for their children and grandchildren. To attempt to fill the gap, Walmart and Target are setting aside more floor space for toys than in previous years; a chain that operates Halloween pop-up shops will open a number of temporary Toy City stores; and Amazon.com is getting into the competitive game by distributing toy catalogs to shoppers visiting its Whole Foods stores. Other general retailers are also planning to increase the focus on toy sales, but it will be difficult for any general merchandise store to provide the selection that Toys”R”Us provided, since toys were the entire focus. As well, the toy store could stock up late in the season, without worry about carrying the unsold toy inventory into the next year. General retailers will be intent upon trying to gauge just the amount of merchandise that can be sold readily, aiming for little or no toy merchandise left in stock at the end of the season. Thus, shoppers that wait until later to gather their gifts will find that the toy selections have quickly dwindled by the time they arrive. For retailers, the challenge will be to get the right toys into the right stores at the right time. A learning season for all, this season.