Toys ‘R’ Us returns to Australia in new online-only deal with sights on 30% of toy retail market

Toys "R" Us

Global toy retailer Toys ‘R’ Us has announced its return to Australia one year after the company’s collapse, resurrecting itself through a licensing deal with local operator Hobby Warehouse.

Hobby Warehouse will now be able to sell toy products from brands such as LEGO, Barbie and Disney through the Toys ‘R’ Us and Babies ‘R’ Us websites, with the brand taking an online-only approach for its first 18 months of launch.

Toys ‘R’ Us Australia collapsed into voluntary administration at the beginning of 2018, two months after the US-based parent company was forced to file for Chapter 11 bankruptcy in the US. The administrators were unsuccessful in finding a buyer for the company’s Australian operations.

However, Tru Kids Brands, a new entity formed from Toys ‘R’ Us’ intellectual property by the company’s former directors, was in Australia earlier this year looking for potential partners to help re-open the business Down Under.

Hobby Warehouse was selected from a field of potential partners, with chief executive Louis Mittoni saying the company was “delighted” to bring the brand back to Australian shores.

“We believe play is extremely important in the development and wellbeing of children and in their interaction with family and friends. Play enables children to develop their imagination, collaborate, problem solve, explore, create or simply express themselves spontaneously,” he said in a statement.

“Our mission is to encourage children to engage with as many forms of play as we possibly can. Hobby Warehouse is a digital native with a keen understanding of how to accelerate and match the requirements of the modern shopper.”

Speaking to SmartCompany, Kevin Moore, commercial advisor to Hobby Warehouse and negotiator for the deal, said Toys ‘R’ Us will have an “obsessive” focus on online in Australia for the first 18 months.

“After that, we’ll look to open some experience centres on the east coast, and then later on some large-format ‘retail lite’ stores, which will have a strong focus on experience with a little stock,” he says.

Moore says Toys ‘R’ Us in Australia had been growing well online prior to the collapse, and only fell apart due to issues with the US company. He says appetite for the brand is immense in Australia, with the company already receiving thousands of hits to the website just hours after the announcement of the re-launch.

“People keep asking me if it’s true Toys ‘R’ Us is coming back. It’s a very well-trusted brand and people remember it from their childhood,” he says.

The company will be targeting 25-30% of Australia’s $740 million toy retail market by the end of 2025, and is also establishing a footprint in New Zealand for the first time ever.

“We are thrilled to partner with Hobby Warehouse to bring Toys ‘R’ Us and Babies ‘R’ Us back to Australia and to launch in New Zealand. Louis Mittoni and his team have a strong digital vision and understand both the heritage of our iconic brands and how to evolve the shopping experience for the modern consumer,” Tru Kids executive vice president of global licensing and general counsel James Young said in a statement.

“This is an exciting milestone for our company as we continue to grow Toys ‘R’ Us and Babies ‘R’ Us around the world.”

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