Toys “R” Us Faces Closures as Landlords Demand Unpaid Rent

Toys “R” Us Canada is facing considerable financial difficulties as several of its locations shut their doors due to unpaid rent. Recent terms by landlords indicate that the retailer is in considerable distress following a series of closures.

Toys “R” Us Closures Continue Across Canada

Multiple stores across Canada have recently closed, stemming from substantial unpaid rent obligations. The following locations have been affected:

• Guelph: Stone Road Mall — Lease terminated on January 17.
• Langley, B.C.: Willowbrook Shopping Centre — Closed on January 13.
• Calgary: CrossIron Mills Mall — Not in occupancy since January 16.
• Sarborough: Town Centre Mall — Closed shortly after Christmas.

The Guelph store’s lease termination was initiated by Primaris Management Inc., which issued a legal notice demanding the removal of inventory and fixtures by January 30. Notices of lease defaults were also posted by QuadReal Property Group for the Langley location, citing over $98,000 in unpaid rent.

Significant Shrinkage in Store Count

Over the past five years, Toys “R” Us Canada has shrunk considerably. In 2021, the chain operated 81 stores, but as of now, only 40 remain listed online. However, many of these links lead to non-functional pages without store information.

Locations across cities such as Calgary, Langley, and Guelph are just a few impacted. The chain’s decline accelerated after the acquisition by Putman Investments Inc., which purchased Toys “R” Us Canada from Fairfax Financial Holdings in 2021.

Background on Financial Challenges

The American parent company, Toys “R” Us Inc., filed for bankruptcy in 2017, leading to liquidation of its U.S. and UK operations. At that time, Fairfax bought the Canadian brand’s operations for $300 million. However, financial instability remains a reality for the brand.

Putman Investments, led by Doug Putman, had previously invested in various retailers, but faced challenges as well. Their recent ventures into other retail spaces have seen stores close shortly after opening.

Economic Factors Impacting Retail

The current economic climate is posing additional challenges for retailers like Toys “R” Us. Rising living costs and economic anxiety during the ongoing trade war with the United States are affecting consumer spending. This situation is exacerbated during the winter months when retail sales generally see a decline.

Furthermore, the company’s e-commerce platform is temporarily down for maintenance, adding to the retailer’s struggles. Toys “R” Us is not alone in facing these challenges; other retail brands under the Putman umbrella are currently experiencing similar issues.

As the situation evolves, many are questioning whether Toys “R” Us can remain afloat amid increased financial pressure and diminishing storefront numbers.