The decline and imminent closure of Toys R Us, is just another major retail brand closing its doors. Back in the late 1990s, I had many discussions with the company on the possibility of them entering the New Zealand market. We were very close to securing the brand but at the last minute they decided not to, which at the time was a great disappointment as we wanted this major category killer in our centre at the time.
For those of you who are not familiar with the brand, it has been an iconic toy store brand in the USA and beyond for many years. It offers a full range of toys and games and the stores were renowned for in store toy demonstrations, they were a great experience for children and children alike.
"So why did they close?"
It wasn't due to online shopping. It was purely a reflection of the market and competitors who offered a wider choice not just toys. It also demonstrated just how retailers specialising in one sector of merchandise, need to seriously consider varying their product range to enable them to maintain a future order book.
"Let's face it, in New Zealand, there are few if any Toy stores operating in New Zealand, without doubt they are a forgotten breed."
In the USA, the majority of Toy Sales are via the general merchandisers such as Walmart. The same applies in New Zealand with The Warehouse and Farmers Trading dominating the major share of toy sales. Being flexible is the key to success in all retail markets.
Being a one off category killer may not be the best measure of success into the future. Few branded stores will be able to survive into the future if they do not contain a wide range of merchandise beyond one specialist category, those days have gone.
Paul Keane is a registered property professional and has vast experience in New Zealand’s commercial property industries. He provides retail and property consultancy including development management to many New Zealand property owners, developers and city councils. This post originally appeared on RCG's blog.