New Toys ‘R’ Us Owners Mull Physical Stores Next Year

(Bloomberg) -- The hedge funds that now own the Toys “R” Us brand plan to relaunch the toy retailer as a standalone operation next year, according to people familiar with the matter.

Solus Alternative Asset Management and Angelo Gordon will look to raise capital to help revive the chain, which closed its last stores at the end of June, and are making plans that include brick-and-mortar locations, the people said.

Before opening their own establishments, the funds are partnering with Kroger Co., the largest grocery store operator in the U.S., to create pop-up sections named Geoffrey’s Toy Box in about 600 stores. The areas inside the supermarkets will appear starting this month, selling a selection of toys from brands like Imaginarium and Journey Girls, Kroger said in a statement Friday.

The bigger plan is still in the works, the people said, and could change depending on various factors including financing. Representatives for Angelo Gordon and Solus Alternative Asset Management did not comment.

Rebuilding the Toys “R” Us brand remains a daunting task, especially since the chain’s leases and distribution centers were sold in the liquidation. While a few retailers have found a second life after liquidating, it’s usually been online only or as a section in another store.