In my years of writing about retail, I’ve seen a lot of names come (hi, Fabletics) and go (so long, Musicland, Montgomery Ward, etc.).
It’s very rare when one comes back. Case in point: Toys R Us (TRU) is returning to physical retail in the U.S. after being forced into bankruptcy in 2017. But with a new owner (WHP Global), Geoffrey the Giraffe and company are making a comeback.
So, it was a real treat to hear Yehuda Shmidman, chairman and CEO of WHP Global, speak at a session about partnerships at the recent Shoptalk conference in Las Vegas. An expert in acquiring and monetizing brands, including Anne Klein and Martha Stewart, Shmidman clearly has a particular love for this company.
“Bringing back Toys R Us is a no brainer,” he told the audience. “That emotional memory is in us all.”
TRU has opened a flagship at the American Dream mall in New Jersey and is on track to open 400 in-store shops in Macy’s this year — it already operates on macys.com and so far has doubled the department store’s toy sales. Even more important, 93% of all customers who came into macys.com through the Toys R Us site cross-shopped at Macy’s, too, Shmidman revealed.
“Think of the magic of Macys, the parade, the fireworks,” he said. “It had to be an omni-channel experience. The leadership at Macy’s is awesome; we’d worked with them for years through WHP. The leadership just gets it. I don’t think this partnership would have been imaginable years back, but now it’s obvious.”
TRU has remained in physical retail, he reminded the audience, with 900 stores doing $2 billion in sales annually outside the U.S., including a new one in Dubai. Plans call for growing the retail footprint over 50%.
“It’s a very exciting moment in time,” he said.
Equally as enthusiastic about stores was Jamie Salter, founder, chairman and CEO of Authentic Brands Group, who also spoke at the conference. (Shoptalk gets heavy hitters.)
“There’s no doubt that we look at e- commerce, but we really look at physical re-tail. It’s a big indicator for us as to how things are going,” Salter said, down to individual SKUs of the company’s brands, which include Aéropostale, Brooks Brothers, Forever 21, Nine West, Reebok and Thomasville. “I love stores. Without omnichannel, we believe e-commerce won’t do as well.”
Forever 21 has been launched into the metaverse, though Salter acknowledged that not a lot of product is being sold. But online is serving as a great source of research.
“As a mall retailer, we believe physical retail is important,” he continued. “Over the last two to three years, physical is becoming more of an experience. But what we’re also seeing is that the consumer is changing. Now, the consumer is saying ‘I want that pair of jeans’ — and obviously they get that from the website.”
Authentic Brands has been on an acquisition spree in recent years, and likely will continue in the entertainment realm as it fuels the retail business. And the privately held firm likely will go public or do a major transaction next year to offer its investors a return.
Gina Drosos, CEO of Signet Jewelers (the parent of Kay, Zales and Jared), noted that the reinvention of the company in a very fragmented sector of retail was based on digital informing the physical experience. Her first action on becoming CEO was purchasing James Allen, a digital jewelry company.
Today, “90% of our best customers interact with us online,” she said.
The company cut costs in areas not visible to the customer, while focusing on trends that do appeal to Generation Z, including establishing trade-in programs and recycling to ap-peal to that audience’s desire for sustainability. Re-commerce also is now a factor, with the company’s 2021 acquisition of Rocksbox, a jewelry subscription and rental company that can fuel sales in the long-term. Future acquisitions would focus on rentals or a service business as Signet continues to expand.
“We started as a $6 billion company; we wanted to be a $9 billion company,” Drosos said. “Last year was great — we got much closer to our $9 billion vision.”
After so much negativity about retail during the pandemic, it was a pleasure to hear positive stories of reinvention — let’s hope we hear even more when the industry gathers in person again in Las Vegas this month for ICSC.
Debra Hazel
Debra Hazel Communications
North Las Vegas, NV
(201)618-5247
