Toys “R” Us meets Macy’s

I have written a number of blogs about the various (attempted) resurrections of Toys “R” Us over the years after declaring bankruptcy in 2017. The most recent rebirth concerns department stores – Macy’s is now featuring Toys “R” Us branded toy departments inside their department stores. I initially greeted this announcement with a healthy dose of skepticism, and decided to visit a couple of stores – the Briarwood Mall store in Ann Arbor, Michigan and the Stoneridge Shopping Center store in Pleasanton, California. (While I would like to say that this was part of a carefully curated sample, the reality is that my wife and I live in Ann Arbor and we were visiting our daughter’s family in northern California).

To my surprise, the look and feel of the Toys “R” Us departments were fairly impressive. The Ann Arbor department was about 2,000 square feet in size, while the Pleasanton department was much larger at 6,200 square feet. Merchandising between the two stores was relatively consistent, with sections devoted to specific brands and characters (such as Barbie, Disney princesses, and Marvel). Inventory levels were fairly strong, with some but not an undue number of out-of-stocks.

Despite the look and feel of the departments, it is difficult to see how they will be able to carve out any discernible market share in the toy industry. They are small, and relatively inconvenient for shoppers looking to buy a gift (unless they happen to be in Macy’s to begin with). Furthermore, they are burdened with the inconsistent pricing offered at Macy’s – high department store prices meet promotional discounts. (It was interesting to note that most of the toy department space in both stores consisted of brand-focused merchandising shown above, as well as heavily discounted sections with merchandise thrown together somewhat haphazardly).

Big picture, it is difficult to see how these departments will make much of an impact on either Macy’s or the toy industry as a whole. This was confirmed by a purchase for our 2-year grandson – the Hot Wheels Skate “Tricked Out Pack” which my wife bought for $2.29 from the bargain table (the same product sells for $20,00 on Amazon.com). At those prices, it’s hard to see how they will achieve any meaningful dollar share.