Toys “R” Us Canada plans to open two new stores next year as it aims for significant growth now that most consumers understand the toy retailer did not shutter its doors like its American and British counterparts.
“We struggled a fair bit in the Canadian marketplace with people just fundamentally thinking that we were gone,” said Frank Juhasz, vice-president of marketing, public relations and omni-channel innovation.
The confusion came as the American and U.K. operations liquidated stores. The Canadian business filed for creditor protection and Fairfax Financial Holdings Ltd. purchased it for $300 million last year.
The company invested in what Juhasz called a monumental marketing effort to inform Canadians its stores remained open and that initial confusion has finally dissipated for the most part.
“That has helped us turn the corner,” he said, referencing store traffic, sales and other key indicators.
Now, Toys “R” Us Canada is poised for expansion with deals already signed for two new stores to open in the first half of 2020.
They will be smaller than the company’s typical big-box format, but bigger than its roughly 930-square-metre Guelph, Ont., location, opened last year under the Toybox banner. The locations remain a secret, but Juhasz said they won’t be found in a major market like Toronto.
Toys “R” Us also continues its efforts to refresh customers’ in-store experiences at its current 83 locations.
It’s renovating stores, and making smaller, less-capital intensive changes at all locations while the longer renovation process takes place. That includes working on cleanliness, as well as updating staff uniforms, said Juhasz.
The company continues to collect market research to determine how best to become an experiential shopping destination for parents and kids. It has piloted hosting birthday parties, lactation consultants and car seat installation clinics. It’s considered partnering with a food service.
Toys “R” Us is focused on being the absolute baby and toy authority for Canadians, he said, which will hopefully differentiate it from competitors. For Walmart Canada, for example, that segment is only one of a wide range of goods the retailer sells.
But that specialist designation moves Toys “R” Us away from another big consumer trend: the desire for convenience. They can’t pop into one of its stores and pick up a toy alongside groceries, household supplies or other things on their to-do list.
Juhasz isn’t too concerned, saying that the toy seller does offer convenience in some ways.
Some Toys “R” Us shops are located in malls, which means they can be part of a bigger shopping trip, he said. But the broad selection of products at standalone buildings makes them worth the drive, he added.
The company has worked to offer a better digital experience, as well. It will launch a new website in the first week of September, and plans to offer next-day shipping this holiday season.
The expansion plan announcement comes a day after the company’s president resigned after more than two decades with the company.
Melanie Teed-Murch tendered her resignation Monday, leaving for an undisclosed new job. She will remain with Toys “R” Us until Sept. 27, said Juhasz, who said her departure is “categorically not” a sign the company may be struggling.
“Everything that we’ve poured into (the company) over this year, over the last year has started to pay off.”
Follow @AleksSagan on Twitter.
Companies in this story: (TSX:FFH)
Aleksandra Sagan, The Canadian Press