Our initial news report about the return KB Toys discussed the intention of bringing back a beloved name which this time around would employ a competitive and sustainable business model resistant to the financial errors made by its predecessor – and Toys R Us. Today, KB CEO Ellia Kassoff elaborated on those plans during his Open Forum remarks at The Toy Association’s PlayCon. Among the highlights:
– 300-400 KB pop up stores will open during the 2018-19 holiday season as a quick way to test each market, while the best performing of those pop ups will be reviewed in early 2019 for potential expansion to one of the larger permanent 600-800 stores.
– Simon is among the many mall organizations that replied with interest to Kassoff ‘s LinkedIn post and are now aboard as investors; banks, outside investors and private equity are not involved in this version of KB Toys.
– Of special interest to collector communities, a dedicated “Toy Nerd” in each store will help buyers with in-store hot off the delivery truck purchases, along with events like meet and greet autograph sessions with toy designers.
Will you be looking for Transformers at KB Toys later this year? Kassoff’s presentation runs approximately 48:35 – 1:12:48 of the clip below, check it out and then join to the discussion on the 2005 boards!
Doug
I remember KB Toys. Back in the 90's I bought several Power Rangers toys from there.
RKillian
Best Buy is an awful example. They're a Radio Shack with more space for iPhone covers. Screw you if you're looking for actual electronics.
Aernaroth
'We have everything we need to get started… Except for funding to allow us to do all the stuff we think we need to do to get started…'
A really bad sign. It sounds like they've gotten nowhere the last three months.
Smitty.1981
The nice thing about Best Buy, and other specialty shops, is that you can go in and ask "I need a ____ for my _____ to ____?" and get someone that knows what the hell you're talking about. Try that at Wal-Mart or Target and you might as well say "Mihi opus fune quia printer et posuit eum in network non possum?"
TFXProtector
THIS. Would I like a one-stop shop akin to Walmart and Target? Sure. Who wouldn't? One trip gets you groceries, clothing, gas, toys, and heck…if there's a bank, a home loan. Some even have doctors offices, if that's your thing. Problem is, Walmart doesn't have it all under one roof and they don't always have it in stock when they do have it all under one. I'll drive to 3 or 4 different stores if it'll get me what I want when I want/need it AND it's either MSRP or saving me money in the long run.
I'll gladly go check out Best Buy before I'll darken the doorstep of Walmart or Target.
MWG
A few years ago people thought Best Buy would be gone by now. They are not in perfect shape yet but have come back from the brink. Stores like Amazon and Walmart can continue to dominate markets, but can not guarantee that they will always be able to completely satisfy all their (potential?) customers. People will always want other options.
+-MWG-+
Afterburner
A lot of naysayers here, but the numbers are simple. There is a market here. You just have to be smarter than a venture capitalist, which isn't hard at all.
Not saying it will be Kay Bee, not saying it will be TRU, but something will develop.
G.B. Blackrock
I see a person who has big dreams, which he honestly wants to turn into reality, but realistic idea of how to go about doing so….
teemu8
It's just a pipe dream. Today's toy retail industry is just not worth investing in.
WishfulThinking
Indeed. They'd be better served if they can convince the Owners of Go! Retail group that they could partner with them and bring the KayBee brand to the portfolio at this point.
Smitty.1981
That does not sound good, perticealy where he says, "If you are an investment bank or investor and we have not talked to you, feel free to message me so we can discuss the project." To me it smells of desperation, as if they'v already got to all the bakns and investors that they know of and were shot down, and now they're like, did we miss any one? Come find me.
AzT
Ellia Kassoff on LinkedIn: "I just got back from the licensing show in Vegas and after so many people stopped me to ask the status of @kbtoysstores, I thought I would make a brief statement here. Our strategy is ready to go! We're still in the process of raising money to fund the rebirth of Kay Bee Toys and we're close to picking an investment bank to represent us. If you are an investment bank or investor and we have not talked to you, feel free to message me so we can discuss the project. Ideally, we're looking for companies tied to the toy/retail ecosystem so you have a vested interest in our success. While we have tons of interest, our goal is to pick an investor that will look at this play as long-term and not disrupt the company with a short-term exit strategy. With the $8-11 billion-dollar hole TRU created and still no one to fill that gap, we are the best solution to fix the toy industry. Our strategy is amazing and our name is clean. I believe the "new" TRU still has an uphill battle trying to convince vendors to work with them and employees/customers to trust them. We're working from a clean slate. On a separate note, I stopped to talk to the Isaac Larian and let's just say his reputation proceeded him. #strategy #toys #TRU #KBtoys #investmentbanking"
RKillian
True, but now they have to start small and grow in an environment that is _not_ friendly to businesses in that stage. Look at what's really gotten big in the last decade – apps and websites. There's very little capital expenditure to either of them.
I take $5K of merchandise to fill one booth at one show. It's actually really dense because I couldn't make my $100 back otherwise. Now pretend you want to fill even a dozen Radio Shack sized stores you're renting for $100K+ per location per year. This is the uphill fight a new retailer is looking at. If it was viable, some of your favorite online shops would've stepped into the void.
You know why e-commerce is so big? No landlord to mug you every month. Don't kid yourself thinking we'd have local businesses instead. If supply and demand worked, rent would've crashed as the Internet took off.
This is why letting either KB or TRU collapse was such a big deal to some of us. We knew that no magical Santa Claus was coming to the rescue. Retail market is toast. Buy your toys online or learn to do without.
Autobot Burnout
TRU was technically profitable by the numbers – but it didnt overcome the needlessly huge debt that Bain capital looted it for.
teemu8
KB Toys isn't coming back. Alone Retail Toy stores are DEAD. The good Toys are mostly bought online.
The End
agp
Good insight guys. No one in big corporate ever seems to have the good sense to say "the market won't allow for the same profits anymore, lets maintain or reduce prices to keep market share". So much short term thinking and greed. When the problems become so evident that the blind can see is the only time real action seems to be taken. The problem with toys is I don't think all damage to their market share of entertainment can be repaired. If a customer has found an alternative or seen how unnecessary the product is why would they come back.
lordsmurf
Like I said, many/most firms are in asset protection mode, and have been for probably 4-6 months now. They won't be crapping out huge sums of money because somebody says 'pretty please'. Also most likely because the folding of TRU showed exactly how fragile that industry is. It's a risky investment in a risky time.
And toy manufacturers are still licking their wounds, no longer confident to rely on a single entity. I fully doubt any of them will pony up funds for a store to sell their stuff. They'd be better off investing those same funds in-house to online sales. HasbroPulse was a good move (for now, they need to give more perks for $50 premium subs, or that'll fail), but I wonder what Mattel is thinking. Matty Collector was probably as craptastic as Hasbro Toy Shop was, arguably worse, but just closing down shop was really stupid on their part. I bought Mattel stock when it was at its lowest point in December, hoping they'll find their way again.
This industry really is fucked to some degree, but both manufacturers and merchants get the blame for it.
RKillian
KB was in trouble before the likes of Amazon Japan and massive black Friday clearances. To think that they stood any chance now was wishful thinking at best. We're in a market correction where overseas labor is costing more but business aren't willing to budge on the fat margins they enjoyed when it was unnaturally cheap which has resulted in higher prices many are unable or unwilling to pay. Their model basically depends on free loans, free rent, free labor, and free advertising. WTF other outcome could there be besides failure?
stad
I'm more surprised by anyone that is surprised by this. Those are the same people that still think HasCon 2019 is happening.
TFXProtector
Huh. Knew there was more to the delay, it was what a lot of us thought: They weren't capable. Don't get me wrong, it would be nice to have an actual toy store, again, but I'm not sure this is it.