Toys “R” Us Canada could soon see its brands, store leases and operating assets divided among separate buyers as the retailer moves toward court approval of transactions that leave the future of its remaining stores unclear.
Court documents filed in Ontario Superior Court show that the retailer’s restructuring process has resulted in three successful bids, with ownership of the Toys “R” Us and Babies “R” Us brands, select store leases and other assets heading to different purchasers. The proposed transactions are scheduled to be considered by the court on June 22.
While buyers have now been identified for key portions of the business, the future direction of Toys “R” Us in Canada remains uncertain. The proposed transactions would separate ownership of the retailer’s intellectual property from a package of store leases and operating assets, creating questions about what comes next for the remaining locations. Court documents also indicate that the proposed acquisition by a Putman-controlled company includes a distribution centre lease, logistics infrastructure and agreements supporting store operations, suggesting the transaction extends beyond a collection of retail locations.
Purchase prices have been redacted from publicly available court filings.
Three Buyers Emerge from Court-Supervised Sale Process
The proposed transactions stem from a Sale and Investment Solicitation Process (SISP) launched as part of Toys “R” Us Canada’s restructuring proceedings under the Companies’ Creditors Arrangement Act (CCAA).
Court filings indicate that three successful bids emerged from the process.
Under the first transaction, U.S.-based Ad Populum would acquire the retailer’s intellectual property portfolio, including the Toys “R” Us and Babies “R” Us brands and related digital assets.
A second transaction would see Fox Group Jumbo Canada acquire the lease for the approximately 48,000-square-foot Toys “R” Us store at Vaughan Mills.
The third transaction involves 2625229 Ontario Inc., a company controlled by entrepreneur Doug Putman, which would acquire a package of operating assets that includes inventory, cash, logistics contracts and 10 store leases.
Taken together, the transactions would divide ownership of the retailer’s brands, physical locations and operating infrastructure among separate parties.
Toys “R” Us and Babies “R” Us Brands Head to New Owner
Among the most significant developments is the proposed sale of the retailer’s intellectual property assets to Ad Populum, a U.S.-based designer and distributor of consumer products and collectibles.
According to court filings and published reports, the transaction includes the Toys “R” Us Canada trademark, Babies “R” Us trademark, Geoffrey the Giraffe design mark, copyrights, domain names, e-commerce assets, websites and social media accounts.
Ad Populum’s portfolio includes brands such as NECA and WizKids, which are well known within the toy and collectibles industry.
The acquisition would give Ad Populum control of some of the most recognizable toy retail brands in Canada and would place ownership of the Toys “R” Us and Babies “R” Us intellectual property in the hands of a new owner.
Putman-Controlled Company Acquires Store Leases and Operating Assets
A separate transaction would see 2625229 Ontario Inc., a company controlled by entrepreneur Doug Putman, acquire inventory, cash, logistics contracts and 10 store leases.
Putman acquired Toys “R” Us Canada from Fairfax Financial in 2021 and has consistently expressed confidence in the long-term value of physical retail. His retail holdings have included Sunrise Records in Canada and HMV in the United Kingdom, among other businesses.
The acquisition package includes stores in Ontario, Alberta and Manitoba, as well as the retailer’s distribution centre in Ancaster, Ontario, giving the purchaser a footprint that extends beyond individual retail locations.
Court documents identify the 10 store leases included in the transaction as locations in Hamilton, Kitchener, Whitby, South Edmonton, Winnipeg (Polo Park), Winnipeg (Kildonan), Barrie, Lethbridge, Nepean and Sarnia.
The acquisition package also includes the lease for Toys “R” Us Canada’s distribution centre in Ancaster.
The inclusion of a distribution centre lease and operational infrastructure suggests the acquisition encompasses substantially more than a collection of store leases.”
The proposed acquisition of 10 leases has attracted particular attention because Putman’s company would acquire physical locations and operating assets while ownership of the Toys “R” Us intellectual property would transfer to another party.
Future plans for the stores and distribution facility have not been disclosed.
The package extends beyond retail locations — court documents show the transaction also includes point-of-sale agreements, e-commerce platform agreements, payment processing arrangements, logistics contracts and warehousing and distribution agreements.
Court documents also contain provisions related to employee transfers. The purchaser anticipates extending employment offers to a substantial portion of retail and head-office staff associated with the retained operations, indicating that the transaction contemplates an ongoing operating structure rather than a simple transfer of leases.
The structure of the transaction leaves open a range of possibilities for the locations. Court documents do not indicate whether the stores could continue operating under a licensing arrangement, support a future retail concept, or serve another purpose.
Temporary Licence Allows Continued Use of Toys “R” Us Brand
Court documents indicate that Ad Populum would grant a royalty-free licence permitting continued use of the acquired intellectual property in Canada through January 15, 2027 for purposes related to the wind-down of retained operations.
While the agreement does not establish a long-term operating structure for the Toys “R” Us brand in Canada, it provides a transition period following closing of the transaction and suggests that certain retained operations could continue under existing branding for a limited period.
Vaughan Mills Lease Headed to Fox Group Jumbo Canada
The third proposed transaction would transfer the Toys “R” Us lease at Vaughan Mills to Fox Group Jumbo Canada.
The approximately 48,000-square-foot location represents one of the retailer’s most prominent remaining stores and is situated within one of Canada’s highest-performing shopping centres.
The acquisition is noteworthy because Fox Group is preparing to launch the Jumbo value retail chain in Canada. Retail Insider previously reported that Jumbo plans to open its first Canadian stores in Ontario as part of a broader expansion strategy.
Fox Group has not publicly disclosed its plans for the Vaughan Mills location.
A New Chapter for a Longstanding Canadian Retailer
Toys “R” Us Canada became the sole surviving branch of the retailer following the collapse of its U.S. parent company in 2018. Fairfax Financial acquired the Canadian operation during that restructuring before later selling the business to Putman Investments in 2021.
For decades, Toys “R” Us was Canada’s largest specialty toy retailer and one of the country’s most recognizable retail brands.
The company sought creditor protection in February, citing inflationary pressures, rising labour costs, supply chain challenges and changing consumer shopping habits. Court filings indicate the retailer owed approximately $91 million to secured creditors and more than $159 million to unsecured creditors at the time of the filing.
The proposed transactions also raise questions about recoveries for creditors. The purchase prices associated with the transactions have been redacted from publicly available filings, making it difficult to assess how much creditors may ultimately recover through the restructuring process.
Published reports indicate the company had 18 stores remaining in April, while additional locations have since been slated for closure.
While court approval remains pending, the proposed transactions provide the clearest picture yet of how Toys “R” Us Canada’s assets may ultimately be divided. Additional details regarding the long-term plans of the purchasers are expected to emerge as the restructuring process continues.
Whether the acquired stores and distribution assets ultimately support a Toys “R” Us-related model, a new retail concept, or another use altogether remains one of the most closely watched questions arising from the retailer’s restructuring.
