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WHP Explains Why it Took a Majority Stake in Toys”R”Us

The parent of Anne Klein and Joseph Abboud has acquired a controlling stake in Toys”R”Us from Tru Kids Inc. for an undisclosed amount.

Brand management firm WHP Global said its deal also includes Babies”R”Us, Geoffrey the Giraffe and over 20 established consumer toy and baby brands. WHP will manage the toy and baby brands under the Toys”R”Us umbrella. The brands generate over $2 billion in global retail sales annually through nearly 900 branded stores and e-commerce sites across more than 25 countries, WHP said. WHP joins institutional investors that include Solus Alternative Asset Management and private equity firm Ares Management Corp. as shareholders.

“Our investment in Toys”R”Us reflects our belief and passion for the brand.  We are thrilled to be taking the reins of the world’s leading toy brand at a time when the category is up 16 percent and consumer demand for toys is at an all-time high,” Yehuda Shmidman, chairman and CEO of WHP, said. “This is a natural fit for WHP, as we can leverage our global network and digital platform to help grow Toys”R”Us and Babies“R”Us around the world.”

Shmidman, who also founded the advisory firm Wave Hill Partners, was familiar with the Toys”R”Us operation and portfolio through his tenure as Tru Kids vice chairman since 2019.

Tru Kids acquired the bankrupt retailer in 2018, and went on to open two stores in New Jersey and Texas. Both assumed a small-footprint popup format prioritizing interactive and experiential features, though they’ve since permanently closed down as a result of the coronavirus pandemic. Stores across Asia, Europe, Australia and the Middle East remain open. Given the international store base, WHP could potentially open stores again in the U.S., depending on consumer behavior.

Including its controlling stake in Toys”R”Us, WHP now manages more than $3 billion in global retail sales. The brand management firm is backed by a $350 million equity commitment from funds managed by Oaktree Capital Management with a leverage facility provided to WHP by funds managed by BlackRock.

In July 2019, WHP made its first acquisition when it bought Anne Klein, expanding the brand to China and Mexico and into intimates. In January 2020, the brand management firm acquired Joseph Abboud from Tailored Brands Inc. for $115 million with plans to grow the brand through global partnerships across Asia, the Middle East and Europe.