retail industry

Toys R Us Is Coming to More Than 400 Macy's Stores Next Year

Source: Toys R Us
  • Toys R Us shop-in-shops will roll out to more than 400 Macy's stores in 2022.
  • A larger assortment of Toys R Us merchandise is now available on Macy's website, ahead of the holiday season.
  • Toys R Us' website will also now be powered by Macy's.

Macy's is joining forces with the owner of Toys R Us to bring an assortment of toys, games and other gadgets for kids to more than 400 of the department store chain's locations and online.

The Toys R Us shop-in-shops in Macy's will roll out next year, the companies announced Thursday. A larger assortment of Toys R Us merchandise is now available on Macy's website.

"Our toy business grew exponentially for Macy's in the past year," said Nata Dvir, Macy's chief merchandising officer. "Our partnership allows Macy's to significantly expand our footprint in that category."

The hope, Dvir added, is that shoppers will visit Macy's in search of toys and pick up a few other items such as apparel or makeup along the way. Macy's could use the boost as it faces stiffer competition online and from big-box retailers Walmart and Target.

More specifically, Macy's is going after the millennial mom, CEO Jeff Gennette said Thursday during a conference call. When these younger parents visit Macy's to shop for toys for their children, they often additionally purchase other higher-margin items, he said.

The company hiked its fiscal 2021 outlook after reporting fiscal second-quarter earnings and sales that trounced analysts' estimates, as it saw new customers online. Macy's shares closed Thursday up nearly 20%, logging a record one-day gain.

Brand management company WHP Global earlier this year acquired a controlling interest in Tru Kids, the parent company of the Toys R Us, Babies R Us and Geoffrey the Giraffe brands.

Tru Kids, which is backed by Solus Alternative Asset Management and funds managed by private equity group Ares Management, bought the brands and intellectual property from Toys R Us after the latter filed for Chapter 11 bankruptcy protection in September 2017. Toys R Us was ultimately unable to emerge from bankruptcy on its own following a crippling 2017 holiday season, pushing it into liquidation.

Tru Kids opened two mall pop-up locations for Toys R Us in 2019, but they shuttered earlier this year due to poor performance during the Covid pandemic. WHP Global had then vowed to reopen brick-and-mortar stores at some point.

WHP Global didn't say how long it will partner with Macy's.

Under the agreement, Toys R Us' website will be powered by Macy's, the companies said. For a period of time, Target was running the iconic toy chain's site, but that relationship fizzled in July 2020.

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