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Toys R Us Canada Sold to Sunrise Records Owner: Interview with Doug Putman

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Putman Investments, a Canadian-based, family-owned company, is planning to acquire Toys’R’Us and Babies’R’Us Canada, Canada’s national toys, games and baby specialist, from certain affiliates of Fairfax Financial Holdings Limited.

Doug Putman headshot
DOUG PUTMAN

Doug Putman, founder of Putman Investments, said the two brands are extremely strong.

“Since its split from the U.S., we’ve watched the way in which the company has grown and focused on the Canadian customer. Much has been achieved and we’re excited to help to drive the business forward,” he said.

“They’re very iconic brands. I think most people grew up with them and have great feelings towards them. Obviously the toy industry is a great industry and sales are strong in the toy industry. With the pandemic, you’ve seen a lot of people choosing to buy a lot more things for their kids whether it’s for outdoor activities or indoor stuff.

“We obviously like retail a lot and so it just fit together for us really well.”

The two brands have 81 stores across all the provinces.

Toys R Us at Willowbrook Mall in Langley (July 2021). Photo: Lee Rivett.

Putman said the pandemic has demonstrated the resilience of the toys, games and baby sector and its value in the hearts of Canadians as was evidenced by the large growth of toy sales the last year.

“We clearly think there’s a lot of growth to be had. We’re 81 stores. I think from our viewpoint we believe that we can open a lot more. There’s a lot of cities out there that don’t have a Toys’R’Us or a Babies’R’Us so I feel there’s definitely some great opportunity,” he said.

“It’s a hard one to quantify. Do I think you can go from 81 stores to 110, 115? For sure. You can grow the chain by 30 plus stores and then the question is where else can you grow? There’s Canada but there’s lots of other countries out there. Where else do we see growth? There’s potential growth in other countries in the toy business. We’ll start with Canada and see where we can get Canada and where it goes.”

Toys ”R” Us Yonge Eglinton – Photo by Dustin Fuhs

Putman is a serial entrepreneur. He is also an owner with Sunrise Records, T. Kettle, FYE (For Your Entertainment), Alex Brands, HMV Retail Ltd (UK), The Granite Restaurant (Bancroft, Ontario), Makin Waves Marine (Bancroft) and Everest Toys (Hamilton).

On Sept. 19, 2017, Toys’R’Us (Canada) Ltd./Ltee announced that after voluntarily filing for Chapter 11 protection in the U.S., the company also commenced a parallel voluntary reorganization proceeding under the Companies’ Creditors Arrangement Act (Canada) in the Ontario Superior Court of Justice in Toronto, Ontario.

At the time, Melanie Teed-Murch, President of Toys’R’Us and Babies’R’Us Canada, said “the restructuring is intended to facilitate the continued success of our iconic brands; building a stronger company for our customers, business partners and team members.”

The company at the time had 82 stores.

“We have financing commitments to ensure normal operations throughout the CCAA proceedings,” said Teed-Murch.

“We are confident that this process will enable us to leverage Toys’R’Us’ existing strengths to succeed. These strengths include our ability to drive same store sales growth, strong EBITDA growth, a portfolio of strong proprietary brands, a leadership position on trend, first to market with exclusive products; and an evolving omnichannel strategy connecting customers wherever, whenever and however they want through our webstore, mobile and store shopping experience.”

Melanie Teed-Murch, Former President of Toys “R” Us and Babies ”R” Us Canada (Image: Toys R Us Canada)

On April 27, 2018, it was announced that Toys ‘R’ Us (Canada) Ltd. had  received both U.S. and Canadian court approval for its sale to Fairfax Financial Holdings Limited.

“Toys ‘R’ Us has a 34-year track record of standalone profitability in Canada (over the last three years, revenue has exceeded C$1 billion annually and, for the last nine years, EBITDA has exceeded C$100 million annually).  With over two decades working in Canada for Toys ‘R’ Us, Melanie has the experience necessary to lead the dedicated employees of Toys “R” Us for the benefit of all stakeholders, kids, families and communities across Canada,” said Prem Watsa, Chairman and CEO of Fairfax, at the time. “We look forward to building for the long-term and allowing the Toys “R” Us team in Canada to re-invest in the business, instead of the past history of just sending earnings to the U.S.”

In a news release on Thursday about the sale to Putman Investments, Watsa said “the transaction continues the implementation of the monetization plan for certain non-insurance holdings of Fairfax.”

Michael Kehoe

“Fairfax retains substantially all of the real estate acquired in our original purchase of Toys’R’Us Canada and, through a continuing royalty stream, we are provided with an opportunity to benefit over time in the future success of the business,” he said.

Michael Kehoe, broker/owner with Fairfield Commercial Real Estate, said the sale of Toys’R’Us and Babies’R’Us Canada by Putman Investments is a significant vote of confidence for Canadian retail and bricks and mortar shopping.

“With 81 stores and around 5,000 staff, this transaction is a major event on the Canadian retail scene in what has been a most unusual year so far.

These brands are a staple on the retail landscape across 10 provinces and their viability is enhanced with the Putman acquisition into the foreseeable future during these challenging times,” he said.

Article Author

Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He now works on his own as a freelance writer and consultant in communications and media relations/training.

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1 COMMENT

  1. The UK seems to be an obvious expansion point for Toys ‘R Us. The brand is widely known there and the HMV stores have presumably given the company better knowledge of the marketplace. Speaking of HMV, I really wish it would return to Canada.

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