Is Babies’R’Us ready to make a comeback or is it just a dream?

Discussion
Rendering: WHP Global
Jan 11, 2023

Babies”R”Us is coming back.

WHP Global, which owns the company, yesterday said that it plans to open its first Babies”R”Us flagship store in the U.S. this summer in the American Dream mall in New Jersey.

“Since acquiring both the Babies’R’Us and Toys’R’Us brands in 2021, our mission has been laser-focused on bringing them back to America,” Yehuda Shmidman, chairman and CEO of WHP Global, said in a statement. “We achieved that mission for Toys’R’Us by opening our global Flagship at American Dream and through our landmark partnership with Macy’s. Our plan to open Babies’R’Us at American Dream in the coming months is a huge milestone in the return of Babies’R’Us to the U.S.A., and it sets the stage for a national rollout of Babies’R’Us in the future.”

Babies”R”Us, which in 2018 went out of business in the U.S., currently operates in more than 20 countries, primarily through digital sites. It also has over 100 standalone stores and side-by-side locations with Toys”R”Us.

The 10,000 square foot flagship, according to a press release, “will be a one-stop-shop for all things baby, offering a full range of products, services and expertise to support the needs of new and expecting parents and families.”

Is Babies’R’Us ready to make a comeback or is it just a dream?
Rendering: WHP Global

The store will seek to engage customers with interactive experiences, including “a Stroller Test Track, Bon Voyage Photo-Opp station where parents can announce their new arrival, and a Wishing Tree, where friends and family members can share their well wishes for baby.”

Babies”R”Us is bringing back new takes on previously popular services such as a baby registry, nursery design center with room set displays, a learning center for private events and educational workshops and a comfort zone where parents can feed and change their babies.

The return of Babies”R”Us comes at a time when the fate of one of its more direct competitors — Buybuy Baby — is up in the air. The chain, which is owned by Bed Bath & Beyond, has been prominently mentioned in the past as an asset that the retailer could spin off or sell. Bed Bath & Beyond last week cast doubt on its own viability when it said “recurring losses and negative cash flow” raise “substantial doubt” about its “ability to continue as a going concern.”

DISCUSSION QUESTIONS: What form do you think “a national rollout of Babies”R”Us” will take and what kind of success might it see? What do you expect Bed Bath & Beyond to do with Buybuy Baby?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Timing is everything and the timing is perfect for a national rollout of Babies'R'Us. "
"Consumers find value in a single location for baby products, particularly when they can experience those products in a way that e-commerce does not permit."
"I don’t see how this will be a success again. The landscape has really changed."

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25 Comments on "Is Babies’R’Us ready to make a comeback or is it just a dream?"


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Neil Saunders
BrainTrust

Potentially there is some room for a dedicated baby concept, especially as Buybuy Baby seems to be failing. However the market is far from empty: Target does incredibly well in baby merchandise because it has elevated ranges and service levels, Amazon and Walmart win on convenience (much valued by parents), and there are a raft of dedicated kids apparel retailers. All of this means that Babies”R”Us will need to think very carefully about how it intends to differentiate and win over customers.

Doug Garnett
BrainTrust

Fully agree, Neil. What can Babies “R” Us offer which is unique enough for customers to seek them out as a destination? That’s not clear at this point. Especially if they are to be embedded in a mall. That said, perhaps they believe that there is a glaring omission in malls with the lack of Target and Walmart. Having bought plenty of baby gear in my life, I doubt that the niche is of the value they expect.

Mark Ryski
BrainTrust

Timing is everything and the timing is perfect for a national rollout of Babies”R”Us. As noted, the competitive landscape is significantly changed, and the Babies”R”Us brand is still relevant to parents. Given the existential challenges facing Bed Bath & Beyond, I expect them to sell ultimately Buybuy Baby.

Katie Thomas
BrainTrust

Babies”R”Us has solid opportunity for success — a category killer in a sector where consumers have lots of questions, want to see things in person, and want to be able to evaluate options. For this to ultimately be a success, it will likely come down to the right merchandise selection and strong customer service. They’ll need to consider how to differentiate from the ease of online and big box retailers, and being laser clear on the role of the physical store to the consumer.

Camille P. Schuster, PhD.
BrainTrust

Integration of product and experience is a good idea. If employee training and performance matches the integration strategy that could be a strong concept. Since the number of babies born each year is variable the roll out strategy is tricky. Maybe Bed Bath & Beyond will be selling Buybuy Baby products while closing Bed Bath & Beyond locations.

Zel Bianco
BrainTrust

When we visited my son and family, I noticed that all the Christmas cards he and his wife received were all from friends with young kids and babies. Seems there is a baby boom going on and not just in my family but everywhere you look. Given that so many big items for babies – strollers, car seats, etc. have changed so much from when my kids were babies, it seems that now is the right time for physical stores where new and expecting parents can try out products.

Ken Morris
BrainTrust

Babies”R”Us has it right: make the store an experience and learning destination for new parents and everyone they know. Experience is everything to Millennials and Gen Zs, and rumor has it they’re the ones having babies these days. I believe this will work as a standalone store or as a leased department within a Macy’s store. The next generation of babies of the Baby Boomers is in full swing and the wealth of that older generation is itching to be spent. What better place to spend it than a one-stop Babies”R”Us? The partnership with Macy’s and their success overseas insures this will be a successful rollout. 

As for Buybuy Baby, it will be tough to compete with Babies”R”Us 2.0 as part of a struggling parent company. As a spinoff, maybe. They’ll have to get everything right, from their tech stack to pricing to, well, everything else.

Carol Spieckerman
BrainTrust

Just as Babies”R”Us was the profitability jewel in the TRU crown for many years, it has the potential to assume the same position in WHP’s portfolio. The timing could seem auspicious yet category killing ain’t what it used to be (see Bed Bath & Beyond). Walmart, Target, Amazon, and others have had long runways to build out compelling propositions in baby and juvenile products, including robust private brand programs. Leaning into immersive in-store experiences makes sense as a differentiator yet some of Toys”R”Us’ past attempts just created clutter and confusion. If WHP pulls off an “R”Us revival it will have beaten many odds, including those challenging brand marketing companies (see Iconix).

Jenn McMillen
BrainTrust

Babies”R”Us’ best bet might be to find a shop-within-a-big-box opportunity where an entity–like JCPenney or Macy’s–would love to turn over the floor space to a category specialist. That way, Babies”R”Us could find their footing before going big.

Gary Sankary
BrainTrust

I 100 percent agree with your argument Jenn; store-within-a-store makes a ton more sense to me for a brand launch than trying to resurrect something from the ashes.

Georganne Bender
BrainTrust

Stores like Babies“R”Us and Buybuy Baby give shoppers the ability to choose from a large curated selection of products in one place, instead of having to visit two or three other stores or do a deep dive online. They are huge for time-starved and exhausted parents.

One thing Babies“R”Us always did well was the in-store experience, the Stroller Test Track alone could be a lifesaver for parents. I also like the idea of store associates who are specifically trained in all things infant and child. Target and Walmart may have a nice selection of baby items but let’s be honest, their associates aren’t going to show a new mom how to operate a breast pump.

Paula Rosenblum
BrainTrust

You mean a category killer? Their time seems to have passed.

Melissa Minkow
BrainTrust

The American Dream mall is a perfect location considering how much of the venue is dedicated to experiences for kids. However I’m a bit skeptical of a heavy nationwide rollout. Many retailers have well-developed baby aisles, so competition certainly exists. I’ll be curious to see if the necessary sales volume can be driven.

Gary Sankary
BrainTrust

I’m not optimistic about this launch. The “R”Us brand isn’t all that attractive these days. The market conditions that negatively impacted the original version of Babies and Kids”R”Us” are even more entrenched now. Mass merchants own the category, and a new Babies”R”Us will have difficulty taking enough market share from those stores to be successful. In addition, where do you put these stores? The neighborhood shopping malls where these stores used to be are now ghost towns. Will they build free-standing stores? That’s a massive investment for what is essentially a start-up. Strip malls are an option, but it feels like, in this category anyway, outlets have taken over, with stores like Carter’s and their sister store Osh Kosh already entrenched.

I don’t understand the need to resurrect a brand that expired in the U.S. years and years ago. I would think a new, fresh brand would be a better approach.

Paula Rosenblum
BrainTrust

It’s tempting to assume that Millennials being in their baby making years would drive a lot of demand, but babies just don’t stay babies long enough, and others have the space covered for shorter money. I don’t see it working.

Carol Spieckerman
BrainTrust

The former BRU identified that problem and embarked on a size (and accompanying product) expansion, at one point, past 4-6X/4-7. It will be interesting to see how broadly the new BRU defines the market (and opportunity).

Liza Amlani
BrainTrust

This is a great opportunity for Babies”R”Us to capture market share from digital and big box players. Customers are looking for engagement and experience as they increase their spend in physical stores. The baby category is not an exception. It’s even more imperative that the customer experience is second to none and the merchandising strategy is data and customer driven. Parents need help and an excellent customer experience will drive loyalty and keep customers coming back.

Amazon, Target and Walmart lack CX. This is where Babies”R”Us can truly make its mark on the market.

Dick Seesel
BrainTrust

The new list of store closures from Bed Bath & Beyond includes just a handful of Buybuy Baby locations. If Bed Bath & Beyond decides to throw in the towel on its business, the Baby stores (and maybe some of the Bed Bath sites) become an opportunity for Babies”R”Us.

Otherwise I’m skeptical that one prototype store in a highly visible mall can be transformed quickly into a national footprint. A partnership with another retailer (along the lines of the Toys”R”Us-Macy’s deal) might move the needle faster.

Scott Norris
Guest

After looking over the TRU carve-out at Macy’s San Francisco flagship at Christmastime, I’d be especially wary about a BRU-Macy’s collaboration. Bare-bones merchandising, little thought to placement and cross-sell context, unkempt and unmaintained. Many commenters point out that baby goods are a high-touch, customer-service intensive category — far more complicated than toys. If Macy’s can’t execute a premium service performance with toys, I don’t have faith they could do it with baby and toddler merchandise.

Lee Peterson
BrainTrust

I think this has a good shot. The niche is not really covered, except for the big and/or little guys, so the customer is there. I think a five store test in various markets in an assortment of real estate and design models fits the bill, but no more right now. If these five (plus online of course) do well this year, then and only then would I think about expansion. Plus, there’s always the Toys”R”Us model as well: areas within other stores like Kohl’s or Macy’s. This model is already somewhat proven. All in all though, good idea to bring it back out of their huge boxes; better all the way around.

Richard Hernandez
BrainTrust

I don’t see how this will be a success again. The landscape has really changed. Amazon is an easy go-to now, Target has a very respectable baby section and grocers like H-E-B that have created baby destinations within their stores. Unless their pricing, assortment and promotional programs are best in class, I do not see how a large swath of these stores will create value.

Ryan Mathews
BrainTrust

Before I can have an intelligent opinion of what I think about a national BRU rollout, I’d need to actually see one of the prototype stores in action. Sure, education and experience are in high demand by parents, especially first-time parents, but in retail the Devil is always in the execution. It isn’t exactly like there is a “Baby Goods Desert” out there, lots of folks — large and small — are doing well in both physical and online retailing. I suspect Busboy Baby may slowly disappear in the sunset again, not because the idea is bad, but because they haven’t cracked the consumer code. The key to being a successful category killer is to continue to innovate at the same time you take out the competition, otherwise all you do is earn the right to sell a lot at reduced margins. That said, I wish them luck, but luck alone won’t keep the doors open or expand the number of doors.

Mark Price
BrainTrust

There is no reason that Babies “R” Us should not achieve success in a retail format going forward. The key factors will be the same as they are for most retail: managing inventory and lease investments. The need is clear. Consumers find value in a single location for baby products, particularly when they can experience those products in a way that e-commerce does not permit. I believe they will have success with this, as long as they employ the “slow and steady” approach to growth.

Brad Halverson
Guest

Parents love the anticipation and planning for a new baby, especially with a first born. The ability to shop and have a tactile experience is aspirational. But a new or revised Babies format doesn’t need to be 15,000 sq ft. Stores can be smaller, with represented item merchandising to order online, with some items in store, not unlike the recently shuttered Amazon book stores and 4-star locations. All it needs to be is an experience for would be parents and grandparents to see, touch and create the life journey they want for their little one.

Shep Hyken
BrainTrust

We know the Babies”R”Us concept works. It’s just a matter of management (good management) doing their thing!

wpDiscuz
Braintrust
"Timing is everything and the timing is perfect for a national rollout of Babies'R'Us. "
"Consumers find value in a single location for baby products, particularly when they can experience those products in a way that e-commerce does not permit."
"I don’t see how this will be a success again. The landscape has really changed."

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