Dive Brief:
- Toys R Us is putting its intellectual property for sale as the retailer winds down its U.S. business. The company has requested in bankruptcy court a June 18 auction date for its IP sale, according to court documents.
- The sale would include the company's trademarks, service marks, domain names, trade names (Toys R Us, Babies R Us and Kids R Us), the Geoffrey giraffe mascot, customer databases, private labels and more.
- The company has already "received numerous inquiries" from interested buyers. Specifically, attorneys with Toys R Us said that 60 potential buyers have emerged, among them "major retailers, infant and juvenile consumer products businesses, brand buying and e-commerce organizations, and short-term strategic partners," attorneys for the company said in court papers.
Dive Insight:
Even as Toys R Us goes through the process of shuttering entirely its domestic business, there are still ways the retailer might maintain a presence in the country where it grew up.
For one, there are a couple parties reportedly interested in buying a chunk of the toy retailer's U.S. stores to operate them, namely the buyer of Toys R Us' Canadian unit and a billionaire toy mogul.
The company could also find a post-bankruptcy life in its brand, as many liquidated retailers have before it. Among them are Toys R Us' former toy-selling peers, FAO Schwarz and KB Toys. The Limited, Sharper Image, American Apparel and a host of others have also seen their brands survive bankruptcy, with varying degrees of success.
A retailer's brand and IP are so valuable that J. Crew's move to spirit away its IP to a Caymans subsidiary, as part of a debt exchange deal with lenders, quickly prompted a lawsuit from some unhappy creditors. According to Reuters, Toys R Us "could be one of the most valuable brands ever sold by a company going out of business."
And who, exactly, buys it matters. It could make the difference in whether Toys R Us survives as a website, a product label, an actual operating retailer with brick-and-mortar stores — or perhaps all of the above.
The Toys R Us auction is also an interesting case study in the breadth and depth of a retailer's intellectual property. An appendix in Toys R Us' motion for the auction includes the company's memorable logos and mascot, its famous jingle ("I don't want to grow up, I'm a Toys R Us kid…") and a huge list of domain names. Many of those names were not nearly as savory as the company's own. Toys R Us, presumably, bought domain names like "adulttoysrus.com" "ihatetoysrus," "sextoysrus.com" — along with all the ones you might expect — to protect that very savoriness of its brand.
Whoever wins the IP auction, will have some interesting decisions to make as they go through the full portfolio of Toys R Us' properties.
