Dive Brief:
- Macy’s and WHP Global plan to bring Toys R Us-branded shops to every Macy’s store, an acceleration of a store-in-store partnership that began last year.
- Macy’s and WHP, which acquired the Toys R Us brand last year, said the store rollout will run from late July through Oct. 15, in time for the holiday shopping season.
- The store-in-store footprints range from 1,000 square feet to 10,000 square feet for what the companies call flagship locations in Macy’s in large metropolitan areas including New York, Miami, Atlanta and Chicago.
Dive Insight:
When Macy’s and WHP first announced their plan to open Toys R Us shops in Macy’s department stores, the plan called for over 400 locations that would roll out through this year. The announcement this week represents a significant increase given the 570 stores in Macy’s portfolio as of March.
The partnership for the Toys R Us brand gives what may be its largest platform since the big box version of it was liquidated in bankruptcy in 2018. Under previous ownership, it opened a mere two stores in partnership with b8ta, which liquidated in the pandemic era.
A Macy’s spokesperson told Retail Dive last year that the retailer was leading the merchandising of the shop-in-shops, with Toys R Us providing support and guidance on toy trends.
Nata Dvir, Macy’s chief merchandising officer, said in a press release that “customer response to our partnership with Toys R Us has been incredible and our toy business has seen tremendous growth.”
In a company presentation, Macy’s noted that 87% of customers cross-shopped in other categories at the department store retailer. The retailer mentioned that first quarter toy sales roughly doubled compared to last year. In Q4, sales were triple what they were in 2019, and 25% of customers shopping Toys R Us at Macy's were new to the department store's brand.
That explains much of what Macy’s hopes to get by bringing the Toys R Us brand to its stores. Toys represent a growth category for Macy’s stores, which have been light on toy sales in recent times, as well as a chance to lure in millennial parents and others with attachment to the Toys R Us brand, who might then shop other departments at Macy’s.
For the Toys R Us brand, the Macy’s shops represent a second chance (or third, or fourth, depending on how you count it) at retail life after the big box retailer of that name declined and ultimately collapsed after years of excessive debt from a leveraged buyout and disinvestment in its operations. The brand, under WHP, has also opened its own flagship store at the American Dream mall in New Jersey.
The Macy’s shops, of course, are much smaller than the old cavernous Toys R Us box stores, though they have the ability to flex up by another 500 to 3,000 square feet for the holiday season, according to the release.
As the partners prep for the holiday season, Macy’s stores plan to hold nine days of in-store events in October featuring “family friendly activities” and toy giveaways to bring shoppers into the Macy’s Toys R Us stores.
