An Ontario court is giving Toys “R” Us Canada permission to split up and sell the business to three buyers, including its current owner, who wants to keep operating the chain or rebrand it.
Judge Jane Dietrich said she will sign paperwork Monday approving the three deals, which will help the beleaguered retailer pay down some of the millions of dollars in debt it accumulated before filing for creditor protection in February.
The first deal will sell the rights to the Toys “R” Us Canada and Babies “R” Us Canada names and logos, along with 150 of their trademarks to Ad Populum.
U.S.-based Ad Populum and its affiliates own retailer Party City and manage the companies behind the Chia Pet brand and Graceland, the Elvis Presley attraction in Tennessee.
The trademarks include the rights to the Geoffrey the giraffe mascot, the Toys “R” Us Canada jingle and phrases like “wish book,” “gotta get it deals” and “play more … spend less.”
The second transaction will transfer 10 store leases, the brand’s inventory, equipment, logistics contracts and bank accounts and balances to a numbered company run by current Toys “R” Us Canada owner Doug Putman.
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Lawyers representing Putman have said in court documents that he has a license to use the Toys “R” Us name until Jan. 25, 2027, and hopes to extend that agreement or rebrand the business.
The final deal will sell the lease for a Toys “R” Us Canada store at Vaughan Mills, a mall just north of Toronto, to Fox Group Jumbo Canada, an Israeli retailer moving its discount home-goods stores to Canada.
Toys “R” Us Canada is already preparing to vacate the location, with signs on the store windows alerting customers to the impending closure.
The toy retailer has not disclosed the value of any of the transactions, but it owes at least $120 million to its vendors and “substantial” amounts to landlords.
Before filing for creditor protection, the retailer closed 53 stores across Canada within two years. It has since shuttered more locations and is now down to 15 stores and 260 employees.
It remains unclear what form Toys “R” Us Canada will take in the future.
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Ad Populum has not said whether it intends to use the trademarks to operate stores or license the Toys “R” Us name to other companies that want to run a retailer or manufacture merchandise.
If Putman cannot extend his Toys “R” Us license, he has not said what he is considering renaming the chain. Putman also owns HMV, Sunrise Records, Northern Reflections, Ricki’s and Cleo.
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He previously launched a chain of home-goods stores called Rooms + Spaces and took over T. Kettle’s tea shops. Both brands have closed all their stores since Putman took ownership.
He has also been an executive at Everest Toys, which was founded by his father and forced into receivership last year by TD Bank, which is owed $25 million, according to court documents.
