Once the dominant go-to toy store for both kids and parents, Toys ‘R’ Us is currently closing all its brick-and-mortar stores. The last U.S. locations will be no more by the end of the week. However, one real estate firm is convinced the spaces that once housed the toy behemoth will get some new tenants rather quickly.
While online retailers like Amazon becomes the preferred place for shoppers to buy products, traditional stores are losing ground. Statistics provided by Fox 6 Now reveal a record-breaking 7,000 retail store locations closed in 2017.
Yet, despite the possible imminent doom of offline retail, many companies are hanging on and even betting there is still room for growth. Data from retail analyst group Coresight Research indicates that despite the unprecedented number of closings, 3,400 stores opened new locations last year. So far this year, 1,900 new openings are planned.
The majority of Toy ‘R’ Us stores were in the Northeast, California, and Florida. Many locations were found in areas known for high real estate prices with substantial upfront investment for new construction, making the empty Toys ‘R’ Us buildings extremely attractive to companies looking to expand.
Real estate analyst Ana Lai with Standard & Poor’s predicts many Toys ‘R’ Us locations will be occupied with something new by this time next year. Recently large retailers have announced bold expansion plans, and it would not be surprising if any decided to take advantage of inexpensive, empty locations made available by the toy chain’s downfall.
Toys 'R' Us Will Close All of Its Doors Forever This Friday After More Than 70 Years https://t.co/RAZrOZWQkN— People (@people) June 26, 2018
Party City already has plans to lease 50 now-closed Toys ‘R’ Us locations and open Halloween and Christmas stores sometime in the fall before the holiday seasons. While these tenancies will only be short-term, other big retailers are planning something more permanent.
With nearly 4,000 stores currently doing business, TJX, owner of brands TJ Maxx, HomeGoods, and Marshalls, will be opening an additional 238 locations by the end of the year. Competitor Ross Stores is opening 100 new stores, and 60 new locations are planned for Burlington Stores. While there may be a good chance, no official announcement has been made from any of these retailers if they plan to use any now-defunct Toys ‘R’ Us locations.
Although it seems Dollar General is opening a new store on every corner, the company has plans for 900 new locations across the country. Dollar Tree will be opening 650 new discount Dollar Tree and Family Dollar stores before January 2019. Neither Dollar General nor Dollar Tree has made any official statements about the possibility of moving into an old Toys ‘R’ Us building, either.
Property owners stuck with empty buildings from closed Toys ‘R’ Us locations are not sitting and waiting for some behemoth retailer to come in and take over the rent. Many landlords are soliciting other types of tenants, namely fitness clubs as well as small companies needing office space.