Toys 'R' Us seemed destined to become a thing of the past. After all of the US stores shuttered earlier this year, it looked like the annual influx of Spirit Halloween stores into the empty husks of the one-time retail giant would be our last reckoning with Geoffrey the Giraffe until they came back around in nostalgia-based content and lists. But the latest news from the group of lenders now in charge of the brand says that's not the case.
The lenders have canceled a planned auction of the brands of Toys 'R' Us and Babies 'R' Us, according to court documents filed in bankruptcy court on October 1, and the funds that own those brands are planning a new company that will be able to open retail storefronts under the name.
Those lenders earned the rights to Toys 'R' Us in the company's long, particularly late-capitalist collapse. The company still operated at a profit, however it was not enough to get out from under $5 billion in debt generated during a leveraged buyout of the company in 2005. (In a leveraged buyout, the company being purchased becomes responsible for the debt accrued in purchasing it.) Toys 'R' Us was forced to file for bankruptcy when they couldn't see a way out from under their own $6.6 billion price tag.
According to Bloomberg, the company is owned by a group of funds that financed the company during the bankruptcy process. The intellectual rights of the company were collateral on that loan. They plan to use the rights to open businesses as they feel that looking to outside investors to purchase the assets was "not reasonably likely to yield a superior alternative.”
While this is all reeks of a particularly icky sort of bundling and re-bundling that we should be sick of at this point, at least it lead to the possibility of more gleaming aisles full of Nerf products (or whatever y'all nerds got into back in the store's glory days).
The new Toys 'R' Us will start out with a steep climb. It's currently in a fight with former workers who are seeking compensation after being thrown out of a job with the sudden shutdown of their retail operations. On the flip side, executives were given millions in bonuses. Toys 'R' Us will also miss out on this upcoming holiday season, which is traditionally when toy stores do the most business.