It seems the Ghost of Christmas Past is haunting Toys ‘R’ Us, as crowds of shoppers pack into its Times Square location for one last Black Friday rush just as the store prepares to close its doors on December 30. The flagship Times Square location’s lease expires in January of 2016 and will reportedly not be renewed as the company looks to roll back costs.
“It is certainly bittersweet,” said Toys ‘R’ Us CEO Dave Brandon in an interview with CNN.
Toys ‘R’ Us announced earlier this year it will be closing its store located at 1514 Broadway. The truly massive three-story, 110,000 square-foot juvenile super-mart has been Toys ‘R’ Us’ premier New York location, a popular tourist attraction, and flagship store for over a decade. It is the chain’s beating heart in one of the most valuable retail spaces in the United States (estimated at annual $50 million for rent, or $2,000 per square foot), even featuring a robotic life-size T-Rex (that actually roars!), a life-size Barbie house and a huge 60-foot indoor Ferris wheel. Toys ‘R’ Us’ real estate team is actively looking for other locations in Manhattan, but so far details are not specific.
Stores like Toys ‘R’ Us, once omnipresent in earlier decades and synonymous with children’s toys, are now struggling to remain relevant in the digital age of internet giants like Amazon and heavy discounters like Wal-Mart. The rise of the “Cyber Monday” frenzy in rivalry to Black Friday sales is symbolic of the direction global sales have taken, favoring the digital over the brick-and-mortar.
“Black Friday is not disappearing, it’s important, but I do think it has lost some of its luster because retailers are starting earlier and earlier, partly out of desperation, to capture more business. Online growth is spectacular. Everyone is bopping around with these mobile devices, and Amazon is grabbing more and more marketshare.”
While most people are out doing their Black Friday shopping, it seems Toys ‘R’ Us employees will get pink slips for their presents this year. The famous toy retailer warned the New York Department of Labor of no less than 373 layoffs. It seems it will be a rough holiday for Toys ‘R’ Us employees. The layoffs are set to occur when the store closes its doors for the final time.
CEO David Brandon further noted the changing trends in the demand for children’s toys when discussing Toys ‘R’ Us’ game plan for the future.
“We are an authority of the toy world 365 days a year. It’s the business we are in,” he said. “I think our larger bets are on toys that are interactive. Young people want voice activation; they want robotics. They have short attention spans so they need lots of entertainment with their toys.”
Despite the somber news of changing times, crowds came out in droves to go to the Times Square store one last time. The news of its closing came just a few months after the closing of its glamorous FAO Schwarz store on Fifth Avenue back in July.
“They did not exercise the option to renew,” he said. “Here’s the long and the short of it. They have 21,000 square feet [on the ground floor]. There really is not a tenant that can rent that. The market has just escalated so.”
The company is currently marketing the property at the Global Retail Real Estate Convention in Las Vegas. It was said that the potential clients are also retailers, though they were not named.
[Photo by Andrew Kelly/Getty Images]