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The Toys R Us shutdown and its impact on local toy stores

By Simona Barca

WASHINGTON – Walking into Sullivan Toys and Art Supplies store in Washington, D.C., today, the display crowded with colorful toys, crafts and pinatas hanging from the ceiling would make anyone feel like a kid again.

The cashier, Lukas Sullivan, who is the owners’ son and has worked at the store since he was 12 years old, greets everyone who walks through the doors as he is manually pricing bobble-head pens with a price gun from behind the counter.

Sullivan says they like to keep things simple and old school. The store doesn’t even have a website.

They cater to their specific neighborhood customer base, keeping their shelves stocked with specialty toys – toys  that “tend to focus on the features of the play, rather than the features of the toy,” – according to American Specialty Toy Retailing Association, an international trade organization for local stores, manufacturers, and sales representatives.

One thing that is different now than it was a little more than a year ago, is the amount of popular toys, Barbies, Hot Wheels, that are also on the shelves.

Joe Guevara, the store manager, says most customers who simply wanted the hottest new toys would usually go to Toys R Us.

When Toys R Us disbanded and all the talk was that customers would simply migrate to the toy departments of large corporations such as Target and Walmart, the American Specialty Toy Retailing Association hired a public relations company to get the word out about local toy stores instead.

In addition to the extra PR boost, they also know that a successful neighborhood toy store has to do more than simply sell toys.

The stores that are thriving in this market are ones that think outside the mindset of simply selling toys and create special events for kids and parents, say experts from the association.

Events for kids include face paint activities, story time, Disney princess day and Easter bunny day, creating a fun environment for kids to make friends, play and return to the store because they enjoyed the activities.

Kimberly Mosley, the association’s president, says there is a specific experience when going to a brick-and-mortar toy store that sets it apart from shopping online.

“You don’t have to put your pants on and get in the car and go somewhere; you can get everything online nowadays,” says Mosley. “So when I do, I go for the experience.”

Phil Wrzesinski, the national sales manager at Haba USA, a toy manufacturing company, refers to these stores as “unicorn retailers.” These are the stores that “look like an oasis in the desert,” says Wrzesinski.

Caroline Roane is the manager at one of these “unicorn retailers” stores, Doodlehopper 4 Kids, in Falls Church, Virginia.

“We try to offer a specialized customer experience,” she says.

Her store, for example, offers free gift wrapping, along with individualized customer service and expertise that customers simply would not get at big department stores.

Sue Warfield, the member relations director for American Specialty Toy Retailing Association, believes that playing isn’t only for kids.

“It’s very important for our brain to stop and play a little bit,” she says of adults. That’s why toy stores where she has seen tremendous success are these “unicorn stores” that put the parents’ minds at ease too.

Having special events for parents, such as wine and cheese, or a sip and shop night, allows the parents to get to know each other better, as well as the store and the products, while their children play. This way, everyone has fun.

Hosting events and parties is another “unicorn retailer” activity that has helped stores such as Sullivan Toys and Art Supplies stay on top of the competition.

“Our bread and butter is Saturday morning birthday parties,” Guevara says.

Besides a few late shipments from manufacturers and having to sell more popular than specialty toys, Guevara says that the shutdown has not had a dramatic effect on his store. As far as he is concerned, his only real competitors are internet retailers, like Amazon.

“I think, honestly, more than Toys R Us ever affected us it’s Amazon and the internet sales,” says Guevara.

While they can’t beat the convenience that Amazon provides, neighborhood stores capitalize on what naturally sets them apart: their interactions with customers.

Helping customers pick out toys, making recommendations and listening about the occasion and the child who will be receiving the toy, are all factors of the specialized customer experience.

Roane says that while her store did not experience any changes in sales immediately after Toys R Us closed, “The Christmas season was definitely much much bigger than in years past.”

Doodlehopper 4 Kids is not the only store with this experience.

Wrzesinski from Haba USA, says that most stores in their network increased in sales in the last year.

“If they had a Toys R Us in their area, their sales went up 10% or more,” says Wrzesinski.

Haba USA, a manufacturing company that did not actually sell to Toys R Us, had its strongest year in sales since before the recession, a lot of which was due to the specialty toy stores having an increase in sales, says Wrzesinski.

“It’s hard to say how much of this was purely Toys R Us but there’s definitely a correlation there,” he says. 

But for some toy manufacturers, the story is not as much a success story as it seems to be for the toy stores.

Dee Farrell ran her own manufacturing toy business, Neat-Oh International, in Northfield, Illinois. Toys R Us was the biggest client of the supplier from which she got the vast majority of her toys. When Toys R Us closed, Farrell’s main supplier company closed, which forced her own store to close its doors.

Because of the time it takes to get a supplier up and running – two years – Farrell had no other supplier to turn to. Her business was failing and there was nothing she could do about it.

“I lost everything,” she says.

More than a year later, she and others like her, are still recovering.


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