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The New York Post reports that as Toys R Us liquidates its US stores, it is finding that “real estate shoppers view its unattractive, boxy stores the same way toy customers did in recent years.”

Toys R Us has about 700 stores, and of the “140 stores that hit the auction block last week, just 50 received winning bids, and 30 of them were from the landlords themselves, some of whom scooped up their own properties for $5,000 to $10,000.”

The retailer has raised just over $37 million from the auction of the locations - and two of them (a San Francisco store that went for $15.6 million and a Chicago location that went for $7.5 million) represented more than half the haul.

There was some good news for Toys R Us - “on Wednesday, it received multiple bids of more than $1 billion for an 85 percent stake in its Asian business.”
KC's View:
The sobering thing about this story is that real estate experts aren’t even surprised - there are so many “retail corpses” out there that there are fewer companies to bid on these locations. Some of them are attached to malls, which themselves are facing a kind of existential crisis. And most of the retailers placing bids for the properties are largely considered to be B-players, not A-players.

It tells us a lot.

Outgoing Ahold Delhaize CEO Dick Boer got some attention this week in which he said that “stores still matter,” and that people who argue otherwise are wrong.

I actually agree with him. Stores will continue to matter, and anyone who says otherwise is a fool. But, the stores that will matter will be the ones that offer surprising, compelling, differentiated experiences … not the ones that are closer to Toys R Us on the attractiveness scale.

(By the way, I would suggest to Dick Boer that if he believes that stores still matter, he should visit a couple of units near me in Connecticut that seem to survive because of location, not because they offer any sort of surprising, compelling, differentiated experience.)