'WE'RE GOING TO SAVE THE TOY INDUSTRY': KB Toys owner plots return as Toys R Us goes out of business

  • KB Toys, the defunct rival of Toys R Us, went bankrupt in 2009.
  • Strategic Marks, which acquired the KB Toys trademark in 2016, is now plotting to revive the toy store.
  • KB Toys pop-up shops could come by this Christmas, with permanent mall stores potentially coming later.

As Toys R Us, the largest toy-store chain in America, prepares to close up shop, an old rival could be reborn to take its place.

Strategic Marks, a company that specialises in reviving dead brands, has a plan to give new life to the KB Toys name.

According to CNN Money, Strategic Marks purchased the KB Toys brand from Bain Capital in 2016. Bain, along with Kohlberg Kravis Roberts and Vornado Realty Trust, invested $US1.3 billion in the $US6.6 billion leveraged buyout in 2005 that took Toys R Us private.

Toys R Us had purchased the rights to the KB Toys name in 2009, the year KB Toys went bankrupt.

Strategic Marks is now moving to revive the brand, and those plans have been accelerated in light of Toys R Us’ struggles, according to Strategic Marks CEO Ellia Kassoff.

KB Toys, he says, could be back as soon as the end of this year.

Kassoff initially announced his plans in a LinkedIn post with the headline “WE’RE GOING TO SAVE THE TOY INDUSTRY!”

“Now, with the closing of @toysrus so quickly, it caught us by surprise so we’ve spent the last few days with our team and leaders in the toy industry to figure out how we can accelerate the project,” Kassoff wrote in a follow-up LinkedIn post.

A return for KB Toys could start with pop-ups around the US during the holiday season, with permanent mall stores potentially following after that. Kassoff says he has already spoken with companies that specialize in pop-up-style holiday stores.

He said e-commerce would also be a big part of the play, but he has not elaborated on those plans.

“Many of you asked what our plans will be and all we can say is we spent the last six months working on a sustainable model to bring back KB Toys the right way so it can compete with not only the big box stores but on-line as well,” Kassoff wrote on LinkedIn, adding that with KB Toys, “we had to also look at why they initially failed and to make sure those mistakes won’t be made again.”

Support from the toy industry has been “overwhelming,” Kassoff said in the second LinkedIn post. Toy makers have reportedly been worried about the ramifications of losing a large nationwide buyer in Toys R Us, which accounted for 20% to 40% of revenue for some brands.

Toy brands also stand to lose hundreds of showrooms in the US from Toys R Us closings.

“The largest toy manufacturers are extremely excited that we’re coming back and one – very large – said they will do whatever they can do to make sure we’re successful,” Kassoff told Business Insider in an email.

CNN Money reported that Kassoff had spoken with Hasbro, Mattel, and as many as 200 smaller toy manufacturers. Some of these smaller toy makers are in trouble, and according to Reuters, Toys R Us’ liquidation plans could spell their doom.

Strategic Marks routinely purchases nostalgia-filled brand names and rights or revives abandoned trademarks, attempting to spin them out into new businesses. One of its highest-profile revivals was Hydrox, an Oreo-like cookie brand that actually beat Nabisco’s version to the market in 1908. Strategic Marks relaunched the cookie in 2015.

More on Toys R Us’ demise:

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