The Toys “R” Us at Stone Road Mall in Guelph, Ont., had its lease terminated on Jan. 17 after the store failed to pay its rent, according to a legal notice sent to the retailer by its landlord.Chris Wilson-Smith/The Globe and Mail
Signs of financial distress are mounting at Toys “R” Us Canada, with multiple locations closing in recent weeks and landlords saying they are owed unpaid rent.
The latest closings add to a contraction that has shrunk the toy chain by more than half in less than five years: In 2021, when family-owned Putman Investments Inc. bought Toys “R” Us and Babies “R” Us Canada from Toronto-based Fairfax Financial Holdings Ltd., the chain had 81 locations across the country. Currently, the website lists 40 stores, but several of those links lead to blank web pages with no address or store information, and lists cities such as Calgary, Langley, B.C., Guelph, Ont., and the Toronto suburb of Scarborough, where locations have recently shut their doors.
In Guelph, the Toys “R” Us at Stone Road Mall had its lease terminated on Jan. 17 after the store failed to pay its rent, according to a legal notice sent to the retailer by its landlord, Primaris Management Inc. A notice posted in the store window by Primaris stated that if Toys “R” Us’ owners did not remove inventory, fixtures and personal belongings by Jan. 30, they would be removed and may be disposed of. On Wednesday, staff could be seen inside packing up items, and shelves were largely empty.
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In Langley, the Willowbrook Shopping Centre store closed on Jan. 13. A notice was posted in the window by the location’s landlord, QuadReal Property Group, saying Toys “R” Us had defaulted on its lease and failed to pay rent and other amounts due. The notice said that QuadReal was owed more than $98,000, according to a report in the Langley Advance Times.
The Toys “R” Us store at CrossIron Mills mall in Calgary was “no longer in occupancy as of the end of business Friday, January 16th,” the shopping centre’s marketing manager, Joel Tatlow, wrote in an e-mail to The Globe and Mail. He declined to comment on the reason for the retailer’s departure.
At the Scarborough Town Centre mall, the Toys “R” Us store abruptly closed shortly after Christmas.
Other stores across Canada have posted going-out-of-business signs: A location in Toronto’s east end had such notices up when a Globe reporter visited in November. And “Everything must go” signs are currently posted at the store in Upper Canada Mall in Newmarket, Ont.
The toy chain was spared in 2017 when its American parent company filed for bankruptcy.Chris Young/The Canadian Press
Another location in Kitchener, Ont., is currently listed for sale for $1.
The Canadian toy chain was spared in 2017 when its American parent company, Wayne, N.J.-based Toys “R” Us Inc., filed for bankruptcy. While the U.S. and British stores were liquidated, investment firm Fairfax bought the Canadian locations for $300-million.
Three years later, Fairfax sold the chain to Putman Investments for an undisclosed sum. Run by Doug Putman, whose parents founded the toy distributor Everest Toys in the 1990s, the firm has invested in several retailers over the years. Those include Sunrise Records, HMV stores in Canada and Britain, FYE entertainment stores in the United States and women’s clothing retailer Northern Reflections Ltd.
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Some of those investments have also contracted. Northern Reflections had 134 locations when Putman acquired the chain a year ago; the website now lists 30 stores.
During the COVID-19 pandemic, Mr. Putman acquired 45 leases for stores vacated by beverage chain DavidsTea, announcing plans to launch a competing chain called T. Kettle. The T. Kettle website currently does not list any locations.
In 2023, Mr. Putman acquired leases for 21 former Bed Bath & Beyond and buybuy BABY locations, announcing he would open a home goods chain called rooms + spaces. Many of those stores began closing within months.
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And last August, the Putman family’s Everest Toys was placed into receivership. Toronto-Dominion Bank filed the receivership application – a process in which a receiver is appointed to take actions, such as liquidating a business, in order to pay back creditors – as it was owed roughly $25-million by Everest. The filing occurred shortly after Everest’s entire board resigned amid “deteriorating financial circumstances,” according to court documents.
January and February are tight times for many retailers, as consumers who are recovering from the heightened expenses of the holidays cut way back on shopping. This year, Canadians struggling with the higher cost of living and broader economic anxiety amid a trade war with the U.S., are keeping a tight grip on their wallets.
This type of climate can be difficult for retailers that are already on shaky ground and that may not be able to hold out during lean winter months with little cash flow.
At Toys “R” Us, the company’s e-commerce store is also currently out of commission: The homepage says that online orders have been suspended while the site is undergoing “improvements.” The websites for Northern Reflections, Sunrise Records and HMV have similar notices posted.
Mr. Putman did not respond to a request for comment on Wednesday.
With reports from Chris Wilson-Smith in Guelph, Ont., and Shane Dingman in Toronto