Toys R Us will be closing around 180 stores as the toy retailer struggles under a heavy debt load. This massive reduction in the number of dedicated toy stores in the U.S. continues a sad trend where many communities no longer have their own toy store outside of a few aisles in their local Walmart or Target. Could this signal the end of the brick-and-mortar toy store in the United States?
I called Brian Volk-Weiss, the executive producer of the wonderful Netflix series The Toys That Made Us, expecting to hear nostalgic stories about the golden age of toys stores. But Volk-Weiss was hopeful about the future of toy stores and, to my great surprise, I ended up getting off the call just as optimistic as he was.
Toy stores are here to stay
“I think it would be absolutely gut-wrenchingly horrible if communities didn’t have a toy store,” Volk-Weiss told Polygon. “There’s a Toys R Us near my office, there’s a Toys R Us near my home, and especially the Toys R Us near my office ... and I mean no offense to anyone’s religion, but I view that Toys R Us as my temple or my church or my mosque. It is a place where I have the most peace. If I’m having a bad day or whatever, I can go to that Toys R Us and wander and look around and have that sense of peace. And every so often I find something to buy. It would be gut-wrenching to me if one or both of these Toys R Us’ go away.”
He pointed out that Toys R Us didn’t have to be in this kind of trouble, and the company’s issues weren’t just due to increasing competition from online toy sales and retailers like Walmart.
“The reason that Toys R Us is in so much financial trouble is because the people that bought Toys R Us did this whole crazy shenanigan thing with reverse-engineering debt and all this other stuff,” he explained. “Had that not done that, I’m not sure Toys R Us would be in the financial trouble it is today ... It’s not like people aren’t buying toys anymore or going to Toys R Us, but decisions that were made created a bad fiscal environment.”
The debt issue is an interesting situation — Bloomberg has an interesting look at what happened if you want to dig into the murky world of leveraged buyouts — but the reality is that there is money to be found in physical toy stores; Toys R Us faced many challenges that were unique to its situation.
Amazon didn’t wipe out bookstores completely, after all. And Amazon itself is opening more physical stores and getting into the grocery business. Volk-Weiss thinks that Amazon’s model of using information from online trends and existing buying behavior to create smarter toy stores may at least partially provide the answer.
“I could see something similar to that happening with toys, where you have a toy store that, instead of being the size of five warehouses combined, it’s only the size of one warehouse,” he said.
A combination of smaller stores and better inventory management would go a long way to making dedicated toy stores a more effective retail force. The future could be in stores with inventory that’s concentrated more on toys that you actually want to buy, where “you’re not seeing the same two characters from Rogue One still on the shelves two years later.”
Even without the sort of inventory management that Amazon is bringing to its bookstores, smaller toy stores with heavily curated selections of products have thrived in many communities, particularly in cities with high population densities. Toys are still a product that people like to touch and try before they purchase, and it’s also a product category that is enjoyable to browse in person.
“It seems like a weird purchase to buy a toy online that you haven’t seen or played with or touched,” Volk-Weiss said. “But that could just be me being 42 and too connected with the way the world used to work.”
The toy business is certainly changing, with many cities now sporting their own vintage toy stores that appeal to adults with greater buying power trying to regain the toys of their youth. And the rise of online stores like Amazon and the impact eBay has had on the collector’s market hasn’t been completely negative. Volk-Weiss talked about the joy of finally finding the Luke Skywalker toy with the green lightsaber as a kid after a prolonged search of multiple stores.
“The bad news is that you’re losing the hunt, the good feeling of finding it,” he explained. “The good news is the risk of not finding it, of being disappointed or, even worse than that, having your children be disappointed, is going away because of eBay and Amazon.”
The Toys R Us closures are certainly concerning, but toys still provide an opportunity for brick and mortar stores that won’t necessarily just be filled by the joyless experience of shopping at the toy aisles of Walmart or buying toys online through Amazon.
“I think 20 years is pretty safe,” Volk-Weiss said when I asked about what’s coming to retail toy stores in the near future. “If you had said 50 years or 100 years ... I don’t know about that. But 20 years from now? Yeah, I’m sure we’re still going to be going into brick-and-mortar.”
Thank the maker.