Toys R Us isn’t dead yet.
The bankrupt retailer, which in March announced that it would close more than 800 stores around the U.S., filed paperwork with a Virginia bankruptcy court on Monday indicating that it will cancel the auction of its intellectual-property assets and instead pursue new business under the Toys R Us and Babies R Us brand names.
The move doesn’t appear to be motivated by a lack of interest from outside parties: The lender group that controls the assets said that it had received qualified bids but that none were “reasonably likely to yield a superior alternative” to its own plan to revive the brand names, keep up the existing license agreements and invest in new retail operations.
The new branding company will be run by the group of private equity funds that financed the Toys R Us bankruptcy and liquidation, a group separate from the private equity firms that bought the toy retailer for $6.6 billion in a leveraged buyout in 2005. The bankruptcy lenders have been criticized for not supporting severance payments for the more than 30,000 Americans who lost their jobs in the bankruptcy.
If Toys R Us begins to open new locations (or move back in to old ones), it will be among the more dramatic retail comebacks in recent years, though far from the only one. Several retailers have gone bankrupt and stayed in business, whether through restructuring (like Payless ShoeSource), additional investment (The Walking Co.) or selling their assets to an outside party through a 363 sale (Nine West). Even bankrupt Bon-Ton, which this spring announced plans to shutter 200 stores, putting 24,000 employees out of work, is reopening some locations, thanks to new ownership (though the company’s priority appears to be e-commerce).
Toys R Us, too, likely won’t return to the vast real estate it held in the past but rather follow the 2018 retail playbook of focusing its efforts online and building a streamlined brick-and-mortar portfolio.