This is it: The end of the end for Toys R Us. The iconic toy retailer closes the last of its 700 brick-and-mortar locations today, June 29, 2018. Toys R Us has always said that specific store closures would vary based on inventory, but now the time has truly come.
Not to beat a dead giraffe, let’s instead look ahead to some of the future occupants of those 700 vacated storefronts.
Retail landlords’ short-term savior comes in the form of Party City, which announced plans to lease 50 former Toys R Us storefronts as seasonal Halloween and Christmas stores throughout the fall. It has no plans at this time to make those leases permanent, but at the very least, it buys landlords some time to find other long-term tenants.
In terms of permanent solutions, CNN Money notes there are a few contenders.
TJX is planning to open 238 new stores this year, including TJ Maxx, HomeGoods and Marshalls locations. Ross Stores plans to open 100 locations this year and Burlington Stores is looking to add or relocate a total of 90. Similar to when Sports Authority liquidated, it’s possible some of these brands will make a move to snap up former Toys R Us locations that are strategically viable for business.
Dollar General is also planning 900 new stores this year while competitor Dollar Tree is looking at 650 new or relocations of Dollar Tree and Family Dollar stores. However, both off-price retailers tend to go for smaller-footprint stores, so vacated Toys R Us stores may be too big to interest them.
Some properties may instead be leased to less traditional tenants such as fitness clubs and offices, while others may even be demolished and redeveloped.
In other words, the future of everyone’s favorite childhood destination is still very much in flux.
In Other Brick-and-Mortar News…
Los Angeles-based Coffee Bean & Tea Leaf announced plans to open 100 franchise locations in New York City over the next 10 years. All told, the company projects to triple its number of U.S. cafes from 311 to 1,000 by 2028 – swooping in on some of the locations that Starbucks has announced it’s closing. Currently, Coffee Bean & Tea Leaf has most of its 1,200 stores in Asia.
Meanwhile, speaking of Starbucks, the world’s biggest coffee chain said this week that it is tripling its average annual store closures with plans to shutter around 150 U.S. locations. However, these closures are reportedly part of a grander scheme. Starbucks says it will open more new company-owned stores (as opposed to franchises) in under-penetrated markets while slowing licensed store growth and focusing on enhancing digital relationships with customers.
Chipotle also announced store closures this week amidst plans to ramp up marketing efforts. The idea is to weed out underperforming locations and enhance other aspects of the business, such as delivery and menu variety. The company is also planning to roll out a loyalty program by the end of the calendar year. Altogether, these moves herald a forthcoming “aggressive growth” stage for Chipotle in the U.S. – and growth often starts with some trimming.
Outside of the QSR category, teen and tween accessory retailer Claire’s announced it is closing another 37 locations in addition to the 95 stores it already planned to vacate. Claire’s has been able to exit 130 leases since filing for bankruptcy. Meanwhile, the brand is staying afloat by setting up concession-style stands in other stores to sell Claire’s products, and plans to expand this business across 4,000 brick-and-mortar locations this calendar year.