Party City Looks To Pick Up Where Toys R Us Left Off

Party City is getting into the toy business. The chain kicked off the week with the announcement that it will be opening about 50 Toy City pop-up stores this year as a bankrupt Toys R Us finishes shuttering its last stores this week.

Those toy shops will roll out along with the Halloween City pop-up shops the brand operates seasonally and will be targeted toward “optimal” markets with “attractive leasing opportunities.” Given the struggles some segments of physical retail have experienced in recent years, many retailers have sought to negotiate favorable rates to fill vacant spots.

Toys R Us leaves a fairly large hole in the center of the market for toys — not to mention a fleet of large, empty store locations behind it.

Party City believes it can fill in some of that void — despite competition from firms like Walmart, Amazon, Target, Dollar General, Barnes & Noble and Five Below. There is also talk that KB Toys is considering a strategic comeback.

“Throughout the retail reporting cycle, we’ve heard from a number of large and mid-sized retail chains that they expect to step in to compete in toys in a more meaningful way post-TRU,” Jefferies analyst Stephanie Wissink said in a recent note to clients.

“The creation of a Toy City concept to complement our temporary seasonal retail strategy is a logical extension of our brand; one that will allow us to leverage our existing pop-up store capabilities and capitalize on the category whitespace that has recently been created,” Party City CEO James Harrison said in a statement.

The pop-up shops for toys will open in September and run through the holiday season, according to the firm. There will be a concurrent expansion of toy offerings online.