Dive Brief:

• A little over a year after a reconstituted Toys R Us opened two brick-and-mortar stores to much fanfare, the toy seller is now permanently closing the stores, according to multiple media reports.
• The stores, opened in the fall of 2019, were a joint venture between Tru Kids, owner of the Toys R Us intellectual property, and b8ta. Tru Kids did not immediately respond to a request for comment. 
• "As a result of COVID, we made the strategic decision to pivot our store strategy to new locations and platforms that have better traffic," Tru Kids told the Associated Press in a statement. "Consumer demand in the toy category and for Toys R Us remains strong and we will continue to invest in the channels where the customer wants to experience our brand."

Dive Insight:

When Toys R Us was liquidating its stores and putting its remaining assets up for sale, some speculated that its intellectual property might be among the most valuable ever sold in a Chapter 11 auction. The speculation stemmed from the millions of adults who shopped in its stores when they were younger and associated the brand with all the greedy joys of toy acquisition to a child. 

The auction never happened. The toy retailer's lenders — who pulled the plug on the toy store chain and sent it into wind down-mode after it fell short of performance projections in the 2017 holiday season — opted to take ownership of the property instead through what became Tru Kids, which also runs international Toys R Us operations. 

Headed by Richard Barry, the old Toys R Us' chief merchant, Tru Kids partnered with b8ta to open its first two stores under the Toys R Us banner. The stores weren't exactly stores in the traditional sense of buying inventory from suppliers and selling it for a profit. They were more a kind of marketing platform and showroom for toymakers, which paid Toys R Us fees to put their products in the location. 

The store closures come at a time when the toy category broadly has gotten a big bump in the COVID-19 era, with parents seeking ways to entertain children stuck at home. From their closures, it seems traffic declines at the store were severe enough to lower their value as showrooms in the eyes of suppliers. 

The truth is, two stores was never very much after the big-box version of Toys R Us collapsed. Amazon, Walmart and Target largely took over the old toy retailer's market share. Even for a beloved brand name, competing with those giants is a gargantuan task.  

CEO Vibhu Norby told Retail Dive in 2019, ahead of the stores' opening, that the joint venture with Tru Kids would open more stores, and he wouldn't rule out as many as 200. In its media statement, Tru Kids left open the possibility of opening more stores. But for now, Toys R Us' store count is once again back at zero.