VAUGHAN, Ont. – Only a few steps into a Toys “R” Us store just north of Toronto, it’s obvious something is up at the childhood mecca.
Stacks of beer and whisky glasses sit alongside Beatles records and band T-shirts in the entrance way of the Vaughan Mills mall location one June weekend. Roam the rest of the store and among the rows of toys, there are now aisles dedicated to pillows and beauty products and an entire department for kitchen and home decor.
Most of the items bear fluorescent signs advertising 40 per cent off products labelled as being from Rooms + Spaces, the home goods retailer Toys “R” Us Canada’s owner Putman Investments opened in the throes of the COVID-19 pandemic.
What happened to the chain, which appears to have shrunk from 24 stores to two in roughly a year, is a mystery.
Rooms + Spaces declined to comment for this story.
Retail experts, however, say Rooms + Spaces’ retrenchment from standalone locations to its appearance at Toys “R” Us is the likely product of shifting consumer habits amid high inflation, sluggish home sales and competition from several old and new retailers in the same segment of the market.
“The retail landscape in general is struggling. Consumers either have less money or they’re just spending less so that’s an issue,” said Joanne McNeish, an associate professor at Toronto Metropolitan University specializing in marketing.
“The second part is the household furniture landscape. So many people bought things in COVID because they were in their homes and … they’re not purchasing things now for their homes. People are spending money on travel; they’re spending money on experiences.”
And when they are shopping for housewares, there are no shortage of places to look. Stalwarts like Ikea, Hudson’s Bay, Walmart and Canadian Tire feature in most Canadian markets alongside new entrants like Fox Home. Dollarama and Loblaw also keep expanding their merchandise ranges.
“It’s a category that’s really struggled to become a destination of all things,” said Grant Packard, associate professor of marketing at York University.
“There’s a spatula here, there’s a floor lamp there and it’s just kind of odds and sods (across many stores).”
Ont.-based Putman Investments is a relatively new player in the world of housewares but no stranger to retail.
Owner Doug Putman, whose steelworker father Bob started Everest Toys in the 1990s, purchased Sunrise Records in 2014, HMV in 2019 and Toys “R” Us Canada in 2021.
He bought 45 DavidsTea locations when the company filed for bankruptcy protection in 2020 and turned them into a chain of tea shops called T. Kettle, which now lists just two locations on its website.
His journey in housewares began in May last year, when he revealed a plan to snap up 21 properties left vacant through Bed Bath & Beyond and BuyBuy Baby’s recent bankruptcy and turn them into a new concept, Rooms + Spaces.
An August press release announcing grand openings for many of the Rooms + Spaces locations bumped the chain’s expected store count to 24.
Many of those stores appear to have opened, but in the months since, Rooms + Spaces has only retracted. Customers report frequent emails offering significant markdowns and social media is rife with chatter about stores that disappeared within months.
Vancouver media reported the company had to vacate its West Broadway location in December, when legal notices posted on its door noted it had defaulted on its lease.
Sometime after, Rooms + Spaces merchandise started cropping up at Toys “R” Us Canada, where Putman has also recently added departments selling books, music, DVDs and other merchandise from HMV.
Some feel the emergence of Rooms + Spaces products in Toys “R” Us is both an admission of just how bleak the current retail landscape and a brilliant idea.
“Whenever you put two stores together, it increases store traffic for both,” McNeish said.
Those with kids are likely drawn into Toys “R” Us to purchase dolls, Lego and games but then discover the store also has all the housewares they need with young ones around. The same aha moment likely happens every time a grandparent, aunt or uncle visits in search of a gift.
“It creates now something else they might go there for,” McNeish said, guessing that Putman’s goal might be to create a retailer that’s more akin to a department store.
Rooms + Spaces is not the only one applying that logic. Over its history, Indigo Books & Music Inc. has expanded heavily into the toy category and added housewares, Packard pointed out, who once worked for the retailer.
He thinks Rooms + Spaces’ efforts “may work even better than Indigo because the lifestyle of the young family is a broader demographic than the lifestyle of the culture lover or the book lover.”
But taking advantage of those synergies and salvaging the business will take a lot of work because Packard so far feels home furnishings have wound up to be “a little bit beyond” Putman’s core of toys and pop culture merchandise.
Even if Rooms + Spaces doesn’t last, Packard said Putman’s retail prowess might not be thrown into question as much as some might expect.
“In retail businesses, the failure rate is incredibly high,” he said.
“If he bought 10 businesses and seven of them failed, he’s successful.”
This report by The Canadian Press was first published June 28, 2024.
