Jerry Storch, a former chief executive officer of the defunct Toys R Us chain, has been working with multiple investors on a plan to reboot the retailer in the U.S., according to people familiar with the situation.
Credit Suisse Group AG is being used as a financial adviser and the discussions have included Fairfax Financial Holdings Ltd., the investment firm that acquired the Canadian unit of Toys R Us, said some of the people, who asked not to be identified because the talks are private.
Any comeback is considered to face long odds because of how far the former market giant has fallen, the people said. There are also concerns that it might be too late to restart the business in time for this Christmas shopping season, they said.
Shares of Hasbro Inc. and Mattel Inc. initially pared their losses in New York trading on the report. Both toy companies have been hurt by the demise of their largest retail partner.
For a successful revival, Storch's group would have to win a bankruptcy auction for the chain's intellectual property. The real estate portfolio is being sold separately, the people said. Frequently, when a retail chain sells off its brand names and logos, little is done with them. Competitors often buy up the rights to keep them from being used by another rival.
But that doesn't appear to be the case with Toys R Us -- a liquidation that's leaving billions in revenue up for grabs. Competition for its brands, including Babies R Us, is expected, according to some of the people. That interest illustrates how many observers saw the retailer's business as a salvageable one, at least without the unsustainable debt load that pushed it into bankruptcy.
Representatives for Fairfax, Toys R Us and Storch declined to comment.
Storch took over the chain shortly after Bain Capital, KKR & Co. and Vornado Realty Trust took Toys R Us private in a debt-laden 2005 deal.
Business on 06/26/2018