# Toys R Us opens 120 standalone stores this holiday after 2017 collapse

*The resurrected brand proves physical retail still sells toys when the format shrinks and the model adjusts.*

By **Jenny Huang Goodman MPA MSc MHSA, Principal** — The Stash Edge, Hako Shikin LLC.
Published 2026-09-18.

Canonical: https://www.pops4.com/stash/articles/toys-r-us-2026-09-18t00-1
Subject: Toys R Us
Tags: retail expansion, physical retail, store footprint, inventory turn, occupancy cost, toy retail

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Toys R Us announced it will open **120 new standalone stores** across the United States this holiday season, according to PR Newswire. The move represents the brand's largest physical expansion since its 2017 bankruptcy, when it closed all **880 U.S. locations**. The new stores launch under WHP Global ownership, which acquired the intellectual property in 2021.

The brand is not rebuilding the old big-box format. The new locations average **10,000 square feet**, roughly one-fifth the size of the legacy stores that averaged **40,000 to 50,000 square feet**, according to retail industry data. Most stores will operate within existing retail centers rather than as destination anchors. The chain is also partnering with Macy's to operate shop-in-shop toy sections in **450 Macy's department stores** by the end of 2024, per the company's release.

The strategy works because it solves the problem that killed the original chain: excessive real estate cost against e-commerce margin pressure. The 2017 collapse came after years of struggling with long-term leases on massive stores that required **$30 million annually in rent per location** to justify traffic, according to bankruptcy filings. The new model cuts occupancy cost by 70 to 80 percent while preserving the experiential advantage physical toy stores hold over Amazon's browse experience. Parents still prefer to let children touch and compare toys before purchase, particularly for higher-ticket items above **$50**. The smaller format focuses inventory on fast-turn categories and eliminates slow-moving SKUs that consumed square footage without generating turns.

The timing also matters. Toys R Us is launching ahead of a holiday season where toy sales are projected to grow **3 to 4 percent** year-over-year, according to market forecasts, while general merchandise traffic concentrates in fewer stores. The brand is reclaiming shelf space vacated by bankrupt competitors and department stores that cut toy assortments during the pandemic.

A small physical-product brand can run the same play at one-tenth the scale. Identify a product category where tactile evaluation drives purchase but existing retail is either overbuilt or absent. Test a **500 to 1,000 square foot** pop-up in a second-tier mall or strip center where rent runs **$25 to $40 per square foot annually** instead of flagship rates. Stock only the top 15 percent of SKUs by velocity. The threshold is simple: if an item does not turn at least **six times per year**, it does not earn floor space. Use the physical location as a showroom and fulfillment point, not a warehouse. Let customers touch the product, then offer immediate purchase or ship-from-DC for items not in stock. The economics work when rent per square foot stays below **8 percent of gross revenue per square foot**. A **1,000 square foot** space at **$35 annual rent** costs **$35,000** per year. At that rate, the location needs to generate **$438,000 in annual revenue** to hit the 8 percent threshold, or roughly **$8,400 per week**. That is **30 to 40 units per week** at **$200 to $280** average transaction value, well within reach for a curated assortment in a category with shopping intent.

The broader pattern: physical retail is not dead, but the old format is. Brands that rebuild at one-fifth the square footage, one-third the rent, and twice the inventory turn are taking share from both e-commerce and the legacy players who cannot or will not shrink. The next move is not to open more stores. It is to open the right-sized store in the right location with the right cost structure.

## The takeaway

Shrink the footprint to one-fifth the old size, cut occupancy cost by 70 percent, and stock only SKUs that turn six times a year.

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## Publisher

**Hako Shikin LLC** — Virginia Beach, Virginia. Founded 1997. ASI 217876 · DUNS 18-204-6339.
Principal and author: **Jenny Huang Goodman MPA MSc MHSA**.

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