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Toys R Us may have grown up, but the pandemic is fueling its rebirth

The venerable toy chain showcases the joy of exploring — and it is working on a new generation of parents and children

Signage in the Toys R Us section of the Macy's flagship store in Manhattan on Black Friday, Nov. 25. (Jeenah Moon/Bloomberg News)
6 min

It’s fitting that Toys R Us — the once iconic toy store — is being reborn as we grapple with the changes wrought by a global pandemic. After all, the chain was born in the aftermath of another global crisis: World War II. Taking advantage of changes in the postwar world, the store developed a powerful brand and model that is once again captivating consumers in 2022.

In 1948, World War II veteran Charles Lazarus opened Children’s Bargain Town in D.C. The store specialized in baby goods and furniture, and sold a few toys.

Lazarus quickly learned his formula was backward. Parents inquired about the toys more than anything else and toys sold better than furniture. And so, in 1957, he ditched the baby furniture and built “a supermarket for toys”: Toys R Us. Aisle after aisle, copious toys filled seemingly endless shelf space. Lazarus designed the logo with a backward R to give the impression that a small child wrote the name and to reflect the company’s focus on children’s play and family.

His timing was impeccable.

The end of World War II marked the beginning of a period of steady economic expansion that lasted a quarter-century, facilitated the growth of America’s middle class and contributed to higher consumption of goods and services.

The country was also experiencing a baby boom. Between 1946 and 1964, the United States saw more than 75 million babies born. In the 1950s, the nation’s population increased from 153 million to 170 million — the largest one-decade increase in American history.

More babies meant more selling and buying. Predictably, parents bought food, clothing, diapers, school supplies and homes. But they also showered their children with playthings, including Barbie dolls, Hula Hoops, toy guns and boots and chaps, such as those donned by popular film and TV characters Hopalong Cassidy and Roy Rogers.

By the late 1950s, U.S. toy sales had surpassed 1 billion dollars.

So, when Lazarus opened Toys R Us, the toy emporium was a hit. It was one of a kind. Because virtually all toy stores at the time were small-scale, mom-and-pop operations, with many fewer toys available, Toys R Us had no comparable competitors.

By 1965, Toys R Us had expanded to four stores in the Washington area. One year later, it went national when Lazarus sold the company to Interstate Stores, a holding company, and became head of the Toys R Us division.

Over the next 22 years, as its original targeted baby boomer clientele had children, Toys R Us grew to 313 stores, 74 Kids R Us outlets (a children’s apparel spinoff) and 37 international locations — weathering an economic recession and Interstate’s 1974 bankruptcy.

Toys R Us succeeded in large part because it sold highly desirable merchandise at little or no profit and maintained a huge inventory, featuring the best and hottest new toys. This strategy convinced customers that the store discounted all items and that they should do all their toy shopping there — even though the chain was notorious for providing poor customer service. This approach increased the company’s market share — executives’ top priority — from 5 percent in 1978 to 15 percent (of a $12 billion industry) in 1987.

Toys R Us also became a formative part of American childhood.

Geoffrey the Giraffe, the store’s mascot since 1965, and the “I don’t want to grow up, I’m a Toys R Us kid” jingle written in 1982 by Linda Kaplan Thaler and James Patterson (now a best-selling crime author), mesmerized new generations of children.

A visit to a Toys R Us store — which, through the eyes of young children, had every toy imaginable — evoked emotional and audible joy and elation. Star Wars action figures, Cabbage Patch Kids, Transformers, Hot Wheels, LEGO, Monopoly and soon Nintendo and Sega video games filled the aisles. And wandering them, even if lost, offered an exciting opportunity to explore and discover more.

The stranglehold Toys R Us had on the toy market waned in the 1990s because of new and growing competition from Walmart, Target, Amazon and warehouse clubs — which provided better customer service and lower prices.

Slowly over the next decades, Toys R Us declined beyond repair. By the fall of 2017, the chain fell victim to the retail apocalypse — the steep, nationwide decline of bricks-and-mortar retail stores that began with the Great Recession and continues. It eventually filed for bankruptcy and closed and liquidated over 700 stores.

Executives blamed debt problems that prevented the chain from investing in its stores, along with competition from online retailers, for its demise.

But they also pointed the finger at millennials who, unlike their baby boomer parents, delayed marriage and parenthood, or forswore them altogether, contributing to a shortage of young customers who, executives believed, could have boosted the retailer’s revenue.

Since its bankruptcy, Toys R Us has attempted several comebacks, under different parent companies. Recently, it partnered with Macy’s for another. This collaboration began in 2021, when the department store began selling Toys R Us offerings online and has since expanded to housing Toys R Us products in over 400 Macy’s stores.

The coronavirus pandemic is driving the brand’s resurrection. It changed shopping habits. With Americans stuck at home, they shopped online. Retail e-commerce sales rose by 43 percent — from $244.2 billion to $815.4 billion — as a result, according to the Census Bureau’s most recent Annual Trade Retail Survey.

And what did American shoppers buy? Toys. According to the market research firm the NDP Group, toy sales rose from $25.4 billion in 2020 to $28.6 billion in 2021. It concluded that “disposable income diverted from other forms of entertainment was a contributor to the [toy] industry’s growth as consumers continued to look for ways to entertain their children and themselves.”

Toys R Us is now primarily a licensed property, not a retailer. And the name, it seems, can still be profitable because it was a recognized global leader in the toy industry for more than a half-century. It is a brand that customers once loved and trusted, and have since missed.

The revived Toys R Us is certainly different from days of old. But as I have experienced firsthand, wandering through a Toys R Us “department” in Macy’s, it is still exciting and enjoyable and compels one to buy. Its resurgence offers generations of Toys R Us kids a chance to “play” and be nostalgic while introducing the store to our children — possibly the next generation of Toys R Us kids.