Branding Marketing

Toys R Us brand reawakens as liquidators U-turn on IP auction


By John McCarthy, Opinion editor

October 2, 2018 | 3 min read

A US revival of Toys R Us may be on the books after the administrator of bankrupt toy retailer U-turned on a decision to auction off its IP and brand, according to court documents surfaced by Bloomberg.

Toys R Us

A memorable Toys "R" Us TV ad

The group filed for bankruptcy back in 18 September 2017, pursued by 24 debtors. Then eight months ago, 180 US stores were shuttered, followed by the rest of the operation at the end of June. This resulted in a goodbye from mascot Geoffrey the Giraffe that tugged at the heartstrings of some who still heard the brand in high regard.

Amid a complex sprawl of debtors, it looked certain all of the group's assets were to be liquidised. However on Monday, the group issued a ‘Notice of Cancellation of Intellectual Property Auction’. This means that it has U-turned on its plan to sell off the Toys R US IP and will instead look to get the group back on its feet again.

As a nostalgic brand that still carries a lot of weight and could feasibly return with the right investment and direction in the US, the administrators believe they could recoup more money reviving the brand than selling it according to the document.

“The qualified bids were not reasonably likely to yield a superior alternative,” it read.

Solus Alternative Asset Management and Angelo Gordon are among the companies in control of the brand name, it served as collateral on loans they issued to the company. However, American hedge funds including SilverPoint Capital and BlueMountain Capital Management claim to be owed £35m by the admininstrators. This claim could complicate any revival.

Furthermore, with thousands of staff laid off worldwide, there are growing calls to create a hardship fund for those who were left unemployed. In New Jersey, particularly, 1,000 people lost their job at the HQ. Few employees who are owed money from the previous entity will cheer at the brand's quick return to business.

At the time The Drum explored whether the company had adequately fortified against the imposing digital retailers. Writing in The Drum, Kerry Liu, chief executive of Rubikloud, said: “Instead of preserving the magic of the experiences customers treasured, Toys ‘R’ Us let their stores grow stale and disappointing."

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