Behind the scenes: How this SME got Toys ‘R’ Us up and running in two weeks

When independent retailer Louis Mittoni took on the responsibility of reviving Toys ‘R’ Us in Australia, he expected it to take a little while before shoppers flocked back to the brand.

But less than six months after taking on the task, his medium-term projections are quickly becoming a reality, and it’s not even Christmas yet.

“The influx is exceeding our capacity,” Mittoni tells SmartCompany.

“We’ve been doing extra shifts and have started planning to employ quite a few more people.”

The Toys ‘R’ Us and Babies ‘R’ Us monikers are on the way back up Australia’s retail ladder in the lead up to Christmas, as Mittoni invests in getting dormant gears turning again.

Currently operating solely as an e-commerce operation, site visits have skyrocketed over the Black Friday weekend and social media channels are starting to hum again, spurring optimism for an ambitious bricks-and-mortar relaunch early next year.

At one time, the business had 44 big-box stores Down Under, but all that came apart at the seams in 2017, after bankruptcy in the United States spurred an international fire sale of Toys ‘R’ Us assets and many executives pulled golden parachutes, leaving workers holding the bag.

Even Geoffery the Giraffe was about to go under the hammer, until a grouping of executives, led by former chief marketing officer Richard Barry, stepped in to revive the company under Tru Kids Brands.

Mittoni, director of independent retail operation Hobby Warehouse, inked a deal for the local rights to the brands with Tru Kids earlier this year, surprising many who had expected a larger retail conglomerate to scoop up the contract.

Instead, Tru Kids, run by a grouping of former Toys ‘R’ Us executives, opted to hand the reins to an SME owner with a vision for an experience-first concept that aligned with their own ambitions.

Mittoni met Tru Kids boss Richard Barry on his visit to Australia in February and says the pair realised they were on the same page. 

“We shared the same values,” Mittoni says. “We weren’t the largest company that met with them, but we took in a lot of our beliefs and things we’ve learned from Hobby Warehouse.”

But Toys ‘R’ Us, one of the most storied retail brands in the world, is no local toy shop. Mittoni says even running the business online has been a mammoth task.

“We had to get the website running within a couple of months,” the business owner says.

Utilising the backbone of Hobby Warehouse’s website, Mittoni managed to get the operation up and trading in less than two weeks, a timeline set to ensure there was enough wiggle room before the end-of-year sales period.

The retailer has had help. Former Toys ‘R’ Us Australia boss Dianne Guerreiro (who now runs Toys ‘R’ Us in Japan) was actually turning the dial on several years of poor growth for the business before its collapse, driving more sales through e-commerce and in-store. 

The former business also left Mittoni a sizable marketing database, with more than 1.3 million Australians signed up to receive its communications. 

“We’ve been investing in the development and expansion of those databases and social media platforms,” Mittoni says.

But the real future of Toys ‘R’ Us in Australia will become more clear next year when Mittoni unfolds a bricks-and-mortar expansion plan that will see the business open stores in Queensland, NSW and Victoria initially.

Mittoni calls the prospective stores “physical experiential centres”, inspired by the likes of Hamley’s in London, which has emerged as a popular tourist attraction with families.

“It’s very much a different flavour of retail theatre; it will be supported by a significant range of stock, with adjacent warehouses,” Mittoni says.

Elsewhere around the world, Tru Kids’ vision for Toys ‘R’ Us is already playing out, with partners in Europe and the United States unveiling their own bricks-and-mortar relaunches recently.

In the US, Tru Kids has opted for a department-store style model where manufacturers pay for space in their stores and make their own sales. Mittoni would not confirm whether this will be the plan in Australia.

Whatever the plan, it won’t be easy.

Australia’s retail sector is sputtering along at a crawl at the moment, and as prominent executives lob public allegations at landlords, there has been no shortage of veteran brands which have fallen over — including the OG Toys ‘R’ Us.