Toys “R” Us Canada closes another 19 stores in two months, leaving just 22 locations
After closing dozens of stores last year, Toys “R” Us Canada is down to just 22 locations across the country, with only five left in all of Western Canada, a new analysis shows.
The national toy retailer, which once had 103 locations, has been rapidly shrinking its footprint in an apparent sign of struggle.
In the past two months alone, Toys “R” Us closed another 19 Canadian stores — including its last location in British Columbia — according to an updated analysis by the Edmonton Journal and Financial Post.
Toys “R” Us Canada and its owner, Doug Putman, did not responded to requests for comment about the closures.
Moritz Steinbauer, a senior vice-president at the credit-rating agency DBRS Morningstar, said he couldn’t say for sure what fate might be in store for Toys “R” Us, but he said its recent closures and sales don’t paint a great picture.
“You always, continuously, right-size business,” Steinbauer said, adding retailers often close under-performing stores and open others in more promising locations.
“But I think the history that we’ve already gone through (with Toys “R” Us), and the amount of closures are not pointing toward a retailer that is in a growth mode.”
Whatever the cause of the chain’s shrinking footprint, there are some signs of financial strain. Its location in Langley, B.C., — the last one in the province — suddenly closed this month, due to nearly $100,000 in unpaid bills, according to a notice posted on the front door of the store.
Steinbauer pointed out that the
has been under maintenance since at least last Saturday, preventing any online purchases.
“Typically, retailers will not put their homepage down for multiple days for website improvements. So that is probably something I would watch pretty closely,” Steinbauer said.
The online shopping specialist Amazon.com Inc. and bargain behemoth Walmart Inc. have made the toy industry extremely competitive, allowing customers to have their pick of specialty toys at lower prices, with the convenience of delivery.
These pressures may be playing a role in the apparent strain at Toys “R” Us. Over the past year the chain closed 57 locations across the country, including every store in British Columbia and Calgary, leaving Western Canada with a handful of locations in Lethbridge, Edmonton, Saskatoon and Regina.
Since November, when the retailer had 12 of its locations up for sale, Toys “R” Us has found buyers for one of these stores in Calgary, two in Edmonton and one in Kingston, Ont.
The rest are still on the market in Lethbridge, Regina, across Ontario and at the chain’s final location in Quebec. The listing price for the store in Saint-Bruno-de-Montarville, Que., recently dropped by $2 million, down to $17.5 million.
Of the stores that remain open, the lion’s share is in Ontario, where the chain runs 13 locations, but four of the properties are up for sale. A shop in St. Catharines, Ont., which recently closed, had been for sale, but the listing has since been
, suggesting it may have sold.
Tristan Wigglesworth, a YouTuber based in St. Catharines, said he was sad to see his hometown location close last fall.
“To see it gone, it is pretty sad, especially because now, more recently with me having my YouTube channel focused around toys,” Wigglesworth said, adding he probably went to the store more often as an adult than “when I was a kid.”
Wigglesworth, better known online as Tristan from Top Pops, has been collecting Funko Pops and various other items for nearly 10 years, amassing millions of subscribers on YouTube and thousands more on social media. He said before its closure, the St. Catharines Toys “R” Us was a special place for him, having played a crucial role in fostering his love of collecting toys.
When he thought the store was closing last summer, Wigglesworth took his camera and went to look around one last time to make a
for his page. It racked up 67,000 views, with comments pouring in on YouTube, saluting the end of an era.
One American commenter mused that Wigglesworth will now “feel the pain” that the United States has suffered since the company closed stores in that country eight years ago.
The St. Catharines locale is just one of many other Toys “R” Us locations to have closed in the past 12 months, putting hundreds of employees out of work in the process.
In November, the Edmonton Journal and Financial Post reported the retailer operated 40 locations. Since then, the chain has closed 19 and opened one, leaving Toys “R” Us with just 22 stores across the country.
Wigglesworth said he noticed the new store in St. Catharines, a smaller, pop-up-style location in a nearby mall shortly before the bigger shop closed.
Toys “R” Us first expanded into Canada in 1984 with big-box stores that occupied sprawling pieces of real estate. The St. Catharines example may be a sign that it’s testing smaller formats that likely come with lower overhead costs.
Despite any challenges the chain might be facing, demand for toys remains high, Steinbauer said.
“I got two kids, and they’re playing with plenty of toys,” Steinbauer said, adding “before kids get into the computer and iPads, toys, I think, are still very much a thing.”
Aside from the retail behemoths Amazon and Walmart, which can offer better prices, selection and convenience, Steinbauer said Toys “R” Us may also be under pressure from smaller specialty stores, which appeal to niche clientele.
Even some of the brands that fill the retailer’s shelves may be undercutting its business.
Steinbauer said toymakers are increasingly prioritizing sales directly to customers, which he said Lego has excelled at in recent years.
With new flagship stores around the world, Lego is giving its fans more choice to buy online or directly from a store, potentially cutting out middlemen retailers like Toys “R” Us in the process.
What’s more, Lego offers a special customer experience where people can build sets in their stores, pulling shoppers into its physical retail spaces.
Wigglesworth observed the direct-to-customer sales trend with Funko Pops, too. Where the brand previously had items exclusively available at Toys “R” Us, he said they can often be found on Funko’s own website.
Putman, the Canadian businessman who has built a career from turning around struggling businesses, took over Toys “R” Us’ Canadian operations in 2021. While some of his ventures have done better than others, signs of strain in his toy empire emerged last year with a rise in store closures.
Although there’s no public record of the company’s financials, some provinces require notice of mass layoffs of employees, which are made public. For example, Quebec’s employment ministry publishes monthly reports on mass layoffs, providing insight into how many workers are affected by Toys “R” Us closures.
The chain last appeared in one of the reports in
when it indicated plans to shut down stores in Quebec City, Laval and Brossard in January, causing layoffs of 21 to 26 employees.
Estimating that each store across the chain has an average of 22 employees per store, the Edmonton Journal and Financial Post calculate the retailer may have cut more than 1,250 jobs in Canada over the past year.
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