Toys R Us is closing stores across America — and analysts say Target is perfectly poised to pick up the pieces

Toys R Us is closing or selling all of its US stores, and shoppers could head to Target instead. Scott Olson/Getty

As Toys R Us fans reel from the news of its collapse this month, retailers are eyeing the opportunity to cash in.

Amazon,Walmart, and Target have all been named as retailers posed to benefit from Toys R Us stores closing. But in a note to investors on Wednesday, Credit Suisse analysts made the case for why Target could be the front-runner.

According to its research, 90% of Toys R Us stores and 96% of stores in its sister chain, Babies R Us, are located within five miles of a Target store.

“Given Target’s mix and store overlap, we see it benefiting disproportionately,” the note said.

Credit Suisse compares the Target and Toys R Us situation to previous bankruptcies, using hhgregg and Sports Authority as examples. In these instances, Best Buy and Dick’s Sporting Goods were in line to profit most, but in both cases, the overlap of stores was significantly lower than Target and Toys R Us is.

“There is plenty of competition, but Target’s overlap is higher than in recent case studies and should be positioned to take a fair share,” the analysts wrote.

Target has over 1,800 stores in the US as well as a growing online presence.

In a bankruptcy filing this month, Toys R Us blamed Target, along with Walmart and Amazon, for its demise, claiming that these retailers created the “perfect storm” to kill off the chain after cutting prices on toys during the holiday season. Toys R Us said it could not offer such low prices because it relies exclusively on toys for profit.

While Target does not report its toy sales separately,Reuters cited a marketing executive as saying that a lack of other strong toy sellers most likely helped Target keep its “loyalists” away from Toys R Us.

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