Toys “R” Us is in a rush to launch 120 new stores by Thanksgiving, but suppliers, still wary after the retailer’s bankruptcy in 2017, are hesitant to engage with its current management, according to sources.
Go Retail Group, a Texas company known for pop-up stores—including some branded Disney stores—has launched 40 year-round Toys “R” Us locations since 2024 under a license from WHP Global, the parent company that owns various brands like Vera Wang and Marc Jacobs.
As Go Retail aims to increase its Toys “R” Us presence ahead of the holiday season, it’s reportedly seeking extended payment terms from toy manufacturers. Specifically, they’re requesting to pay up to 180 days post-delivery, which has raised some eyebrows.
Many vendors are pushing back, citing that the regular payment window for inventory tends to be between 30 to 90 days.
“They really need to be the ones financing their operations, not relying on their suppliers,” remarked Jay Foreman, CEO of Basic Fun, who produces brands like Tonka and Care Bears. He expressed concerns based on past experiences, mentioning that his company was significantly impacted by the earlier bankruptcy.
Alan Dorfman from Super Impulse, which specializes in miniature versions of classic games, shared similar thoughts, stating that although they want to collaborate, they aren’t currently shipping products to Go Retail. He noted previous difficulties in their relationship.
Toys “R” Us was originally founded 70 years ago by Charles Lazarus and, at its peak, operated over 800 stores. It fell into bankruptcy and liquidation in 2018, burdened by around $5 billion in debt following its acquisition by private equity firms in 2005.
This downfall resulted in immense losses and disorder throughout the toy industry, leaving many in the field with lingering resentment.
Despite this, WHP Global has appointed Jamie Uitdenhowen, a former vice president of merchandising, to lead the revived brand, alongside Matthew Finigan, who has returned as the CFO.
“Many are reluctant to partner with them due to their non-standard terms,” said Michael Drake, a past executive at Toys “R” Us, who reported discussions with multiple toy manufacturers.
WHP took ownership of the brand in 2021 and has formed alliances with Macy’s and Go Retail, alongside international licensing agreements that oversee around 1,680 stores globally.
“As any retailer, we strive for the most favorable terms from our suppliers,” commented Go Retail CEO Gideon Schlessinger, emphasizing their long-standing relationships in the toy industry and consistent purchasing practices.
Apart from Macy’s, there have been about 40 Toys “R” Us locations launched in the past few years, including a prominent 20,000-square-foot store at American Dream mall in New Jersey. Go Retail is managing the rest, with the new 120 stores mostly set in malls for about a year.
Schlessinger claimed they haven’t faced supplier reluctance in working under the Toys “R” Us brand, asserting that the brand’s resurgence has actually strengthened supplier relations.
The expansion comes amid a positive trend for the $46 billion U.S. toy industry, which saw a 17% sales growth in the first half of the year—marking the largest increase in six years. Toys “R” Us used to be a pivotal space for launching new products and trends.
However, some are questioning whether the retailer can still establish itself in today’s market, where companies like Walmart, Target, Amazon, and Five Below have all expanded their toy sections.
“The environment is a lot tougher for them this time around,” observed toy analyst Gerrick Johnson. “Others have filled the gap they left behind.”
Before the bankruptcy, Toys “R” Us stores averaged around 30,000 square feet, contrasting starkly with the newer Go Retail stores, which range from 3,500 to 7,000 square feet, as industry experts point out.
“Those 120 mall pop-ups won’t match the sales volumes of even 20 Walmart stores,” predicted Foreman of Basic Fun.
Tom Neville, a vice president from Connetix, an Australian toy manufacturer, expressed surprise upon learning that Toys “R” Us was offering his company’s products online.
“They certainly aren’t sourcing directly from us,” he remarked, suggesting that the orders likely came from distributors instead.
Neville said he had intentionally kept a distance from the toy sections in Macy’s, which are branded as Toys “R” Us, commenting on the poor merchandising and empty shelves during off-seasons.
Macy’s has opted not to comment on its toy sections, which have seen several store closures since the partnership with Toys “R” Us began in 2022.
Some manufacturers remain indecisive about partnering with Toys “R” Us.
“I’m curious if the new operators will introduce something unique compared to what’s already available on Amazon,” said Brian McDonald, a sales and marketing executive at Simplay3, a producer of outdoor toys.
While McDonald is open to collaboration, he noted that previous considerable losses from the bankruptcy make his company cautious.
At the same time, Drake noted that there’s also a concern about missing out on potential opportunities in this revival.
