Impact of the Toys ‘R’ Us Bankruptcy

Posted on October 02, 2017

Industry professionals who previously sounded the retail death knell will likely ring their bells louder in response to the recent bankruptcy filing from Toys ‘R’ Us. Others continue to insist that e-commerce will not put brick-and-mortar retail out of business. Shopping center owners need not panic.

A closer look at Toys ‘R’ Us reveals that the company’s problems are neither new nor are they the result of the rise of Amazon and other e-tailers. Instead, pundits agree that the company simply failed to keep up with changing retail trends and the reinvention of consumer shopping.

While Toys ‘R’ Us announced that it does not plan to close stores, shopping center owners may be concerned about potentially losing a long-term and large anchor tenant. When this is the case, property owners may consider looking for potential retailer replacements that have learned how to optimize for the new retail economics and the changing needs of shoppers.

Bank branches and restaurants are examples of businesses that attract or generate a lot of walk-in retail business.  Other strong contenders include retail brands that offer service-oriented experiences, such as Apple and Lego, as well as gas stations with a retail component.   Of course, the world is still watching to see what Amazon will do with its new Whole Foods stores around the country.

The professionals with Orion Real Estate Group work with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com.