Toys R Us kids are all grown up, and now many of them will be able to revisit the giant toy store that was a central part of their childhood. 

Like a zombie slowly being awakened from the dead, Toys R Us is continuing its attempts at a comeback by opening eight new flagship stores and 20 seasonal shops across the U.S. as the holiday shopping ramps up.

Toys R Us already had in-store partnerships with Macy’s and opened some flagship stores in recent years. But since shuttering hundreds of stores, Toys R Us left a vacuum in the toy industry. 

“There's an opening out there for a big-box toy retailer. There really aren't any others,” said B. Joseph Pine II, cofounder of the consulting firm Strategic Horizons. 

Toys R Us will not only be able to capitalize on the nostalgia that older generations have for the brand, but they’ll also be able to capture younger generations who want to shop inside a store, said Lauren Beitelspacher, a marketing professor at Babson College.

“When there's no store to go into, you don't get to interact with the merchandise,” Beitelspacher said. 

You lose the ability to touch and feel these products. You don’t know if it’s the right fit for your kid. And you don’t get the instant gratification of buying something in store and owning it immediately, Beitelspacher said. 

This time around, Beitelspacher said she is ”very optimistic” about the company’s success. 

What happened to Toys R Us? 

In 2018, Toys R Us closed hundreds of its stores and eliminating more than 30,000 jobs. The company, once worth $12 billion, had ceded ground to competitors like Walmart and Amazon and was saddled with billions in debt. Beitelspacher said she thinks Toys R Us was also overstocked and hadn’t anticipated customers’ changing shopping habits. 

In the late 1990s, Walmart usurped Toys R Us' place as the country's top toy seller. Then, in 2004, Toys R Us’ board of directors decided to put the company up for sale after years of declining profits. A year later, the private equity firms Bain Capital and KKR, along with the real estate investment firm Vornado, purchased the company for $6.6 billion. 

These firms put up 20% of the total and borrowed over $5 billion, putting all that debt on Toys R Us in a process known as a leveraged buyout. Then, in subsequent years, Toys R Us had to contend with another competitor: Amazon.com. The ecommerce giant exploded and chipped away at Toys R Us’ customer base. 

By 2017, after years of falling sales, management wanted to postpone their loan payments. The possibility of bankruptcy sent toymakers panicking, and they demanded that the company pay them up front in cash that it didn’t have.

So Toys R Us ended up filing for Chapter 11 bankruptcy. 

In the years since, there have been some failed comebacks and shifts in management. But in 2021, the management company WHP Global, now in control of the company, struck a partnership with Macy’s that would bring Toys R Us shops to more than 400 Macy’s locations. 

Toys R Us’ future 

Following the Macy’s partnership, Toys R Us is now expanding all over the country in states like California, Texas, Ohio, New York and Iowa. 

But it’s expanding at a time when the Trump administration has hit countries around the world with tariffs, including China, where a majority of our toys are manufactured. If last year's spending holds constant this year, then consumers will have to pay an extra $132 this year on gifts due to the current tariffs that are in place, according to LendingTree. 

Toys R Us doesn’t have the volume of goods that Amazon does, but it likely has more volume than a mom-and-pop store, which means its margins will probably be better. They’ll be able to import more and face cheaper costs as a result, said Pine with Strategic Horizons. 

And toy stores are seasonal businesses since so many toys are purchased around Christmas time, so Toys R Us’ pop-up strategy makes financial sense, Pine said. 

By doing this, they’ll be able to save months of rental, leasing and managing fees, he noted. 

As for whether Toys R Us is competitive when it comes to prices? “Most of the items sold through Toys R Us are at MSRP, manufacturer's suggested retail pricing, but sometimes the big boxes can sell for lower costs,” said Ali Mierzejewski, the editor in chief of The Toy Insider. 

However, she added that the store “can remain competitive with doorbusters and sales” and “the shopping experience can also add value for customers.” 

That’s because Toys R Us has also become an “experiential retailer,” a popular strategy in the industry, Mierzejewski said. For example, the company is launching a shop with immersive activities based around a popular toy line, while some locations are opening up arcade areas within the store. 

“Those kids that grew up as Toys R Us kids are now Toys R Us parents or Toys R Us cool aunts and uncles. And I think that having those memories as a kid …is something you want to pass down and share with the kids in your life, too. So it really makes having those experiential stores a draw,” Mierzejewski said

Appealing to kids, adults and families is going to be “really important” for Toys R Us’ comeback, Mierzejewski said. In the first half of 2025, adults helped drive growth in the U.S. toy market after a sales slump in 2023 and flat sales in 2024. 

“Since the pandemic, we've seen a lot of adults trying to find that spark of joy for themselves, and a lot of them are finding it through play,” Mierzejewski said.