An Ontario court has granted permission for Toys “R” Us Canada to divide and sell its business to three separate buyers, one of whom is the current owner aiming to continue operating the chain under its existing brand or rebranding it.
Judge Jane Dietrich is set to finalize the approval of the three transactions on Monday, assisting the struggling retailer in reducing a portion of its substantial debt accrued prior to seeking creditor protection in February.
The initial agreement involves the sale of the Toys “R” Us Canada and Babies “R” Us Canada names, logos, and 150 trademarks to Ad Populum. Ad Populum, a U.S.-based entity with affiliations to Party City, manages the companies responsible for the Chia Pet brand and Graceland, the Elvis Presley attraction in Tennessee.
Included in the trademarks are the rights to the Geoffrey the giraffe mascot, the Toys “R” Us Canada jingle, and various phrases such as “wish book,” “gotta get it deals,” and “play more … spend less.”
The second deal encompasses the transfer of 10 store leases, the brand’s inventory, equipment, logistics contracts, and financial accounts to a numbered company overseen by the current owner of Toys “R” Us Canada, Doug Putman. Putman’s legal representatives have stated that he holds a license to use the Toys “R” Us name until January 25, 2027, and aims to either extend this agreement or rebrand the business.
The final transaction will involve the lease transfer of a Toys “R” Us Canada store located at Vaughan Mills, a mall just north of Toronto, to Fox Group Jumbo Canada, an Israeli retailer expanding its discount home-goods stores to Canada.
Toys “R” Us Canada is already in the process of vacating the Vaughan Mills location, with closure notices posted on the store windows. The exact financial details of the transactions have not been disclosed by the toy retailer, which owes a minimum of $120 million to vendors and substantial amounts to landlords.
Following the closure of 53 stores across Canada in a two-year span before filing for creditor protection, Toys “R” Us Canada has since shut down additional locations, leaving only 15 stores and 260 employees. The future direction of Toys “R” Us Canada remains uncertain.
Ad Populum has not indicated whether they plan to operate stores using the acquired trademarks or license the Toys “R” Us name to other entities interested in retail or merchandise production. In the event that Putman cannot extend the Toys “R” Us license, his plans for renaming the chain remain undisclosed. Putman’s ownership portfolio includes HMV, Sunrise Records, Northern Reflections, Ricki’s, and Cleo.
Previously, Putman launched and closed a chain of home-goods stores named Rooms + Spaces and acquired T. Kettle’s tea shops, both of which ceased operations under his ownership. He also held an executive position at Everest Toys, a company founded by his father, which was forced into receivership by TD Bank owing $25 million, as per court documents.
