As the liquidation of Toys R Us marches on, retailers are bidding on the toy store’s brick-and-mortar locations. The latest successful bidders include ALDI, Ollie’s Bargain Outlet, Raymour & Flanigan, Ashley Furniture and Big Lots, CNBC reported.
Landlords are purchasing Toys R Us locations in some cases, and Retail Specialists Executive Vice President Bill Read believes that there will be “solid demand” for the retailer’s locations.
“Most are around successful malls with high barriers to entry, solid demographics and high incomes,” Read told CNBC. “The locations by ‘B’ and ‘C’ malls may take longer to sell or lease.” He also said that some people may wait to see “if they can get a bargain for the real estate.”
The news comes as several national retailers have shown an interest in the embattled toy retailer’s brick-and-mortar locations. Just under 60 “qualified bids” were under consideration, CNBC reported in March. In Florida, for example, Target and Aldi were considering a store located near college campuses. And Big Lots was reportedly interested in five stores, while Raymour and Flanigan was looking to bid on three locations. Other retailers interested in the locations include Ashley Furniture and Food Bazaar. Beyond retailers, real estate investment trusts (REITs) were interested in the stores: Federal Realty and Urstadt Biddle reportedly plan to bid on the same store in California.
As of April, Toys R Us had over 700 remaining locations in the U.S., including those under the Babies R Us banner. If completed, the company’s liquidation would be among the largest in retail history since Sports Authority closed nearly 500 stores, The Wall Street Journal reported. Since a leveraged buyout, Toys R Us has been burdened with over $5 billion in debt. Competition from eCommerce retailers such as Amazon and discount stores such as Walmart hasn’t helped the company either.
As Toys R Us locations gear up for closure, the retailer has also been rolling out new markdowns at its stores. The retailer said in a Facebook post that discounts run from 50 percent off to 70 percent off, with some exceptions, USA Today reported.