Best of Business Wars Daily | Toying Around | 6

0:03You could argue that many of us are clinging to nostalgia more than ever these days. The Barbie movie Mania amped that up and there was a new Teenage Mutant Ninja Turtles flick that jumped on the bandwagon. The target is across the street. We must use stealth and cunning to infiltrate the human world and retrieve Go-Gurt. We've seen it time and again, brands cashing in on those warm, fuzzy feelings of remembering childhood. Or the fun of introducing your own kids to the things you once loved. Well, in a move that surprised almost everyone, Toys R Us is opening new stores, hoping to tap into Gen X and millennial nostalgia.

0:41But is that enough to drive sales? And is there still a role for brick-and-mortar toy stores? Here to talk about all that and more is comedian John Marcos Soresi and James Zahn. He's editor-in-chief of The Toy Book and senior editor at The Toy Insider. Stick around for the best of Business Wars daily.

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3:10From Wondery, I'm David Brown, and this is the Best of Business Wars Daily, where we talk about trends, controversies, and how they affect you, the consumer. Today, we're joined by comedian Gianmarco Sarese and toy industry expert James Zahn. James, Gianmarco, welcome. Hey, thanks for having me. John Marco, I should say welcome back to you. I know you host a hilarious podcast called The Downside where complaining is encouraged, negativity celebrated, silver linings debunked and all that. But since we last had you on the show, you've been going on tour with your stand-up, hitting a bunch of cities in the U.S., next headed off to Europe.

3:46What's that touring schedule been like? Do you change up your set at all when you're heading across the pond? You know, I try to come up with some specific jokes. But, you know, the nice thing about being an American comedian is we really shove our media down the throats of the whole world. So I can, you know, I think it's a lot easier for me to go to Italy than an Italian comedian to come here. So, you know, I might not make fun of Italy to their face, but I like to share my thoughts from America and see how they play. Well, let's give people a taste of your stand up. Let's listen to a clip. I went to college for musical theater, which is like saying I have a PhD in imagination.

4:33Picking your major should work more like Shark Tank, because I would have never gone to college for musical theater if I had to go in front of my parents and be like, I like to act, I can kind of sing, and I can do this. I'm asking for$200 ,000 with a 0 % return on investment, and then I'll become a comedian and talk crap about you for the rest of my life. It's a little bit of John Marco Cerezi in action. James, I want to turn to you. Tell us a little bit about the publications you lead, the Toy Book and the Toy Insider. Well, I am editor-in-chief of the Toy Book. That is the leading publication, leading trade publication, covering the toy industry in North America.

5:13It's been around since 1984. I always tell people that it's essentially the Hollywood Reporter, but for toys. And then I'm a senior editor at the Toy Insider, which is our consumer publication. And that is all about recommendations, insight, reviews and things for toys, games, family entertainment for all the parents, grandparents, cool aunts and uncles and any gift givers that are buying this stuff for the kids in their lives. Now, tell us about The Rock Father. What are you doing with The Rock Father? Is this a publication you founded? it. That's true, actually. So I've been nicknamed the Rock Father for years.

5:50And all the reasoning behind that is that could be a whole nother show. But essentially, after I had kids and whatnot, I sort of took on that name and I was covering all of the toys and games and entertainment and everything on my own through the Rock Father magazine. And I set that up after actually years of working for different entertainment companies and running publications for other people. So I was doing that. The Rockfather exists as sort of a lifestyle publication where I've got cars and stuff for the home and a little bit of music and comedy and stuff mixed in. But that is a that is a back burner priority because I'm so immersed in toys all the time.

6:34You know, once upon a time as a reporter, I got assigned to cover the Toy Fair in New York. You must have done that before right i was just there two weeks ago for the first time in 118 years they moved toy fair to fall um after the last one in february was february of 2020 which is where it's always been and then the pandemic happened so for three and a half years there was no toy fair in new york and then they just did a one-shot version of it that started september 30th so eight football fields full of toys. That's incredible. And has it changed a lot over the years to your reckoning or no?

7:15It's changed immensely. There was a building on Fifth Avenue in New York that used to be called the Toy Building, and all of the toy companies had showrooms there. That's where I went. Yeah, I remember now. That went away. And then since that time, the Toy Fair has been held at the Javits Center. John Marco, you live in New York City now. And as we talk about toys, what what what sort of toy stores did you go to as a kid? I know they have or at least had some really great ones. Oh, yeah. Well, I grew up in Maryland, but my father took me to New York all the time when I was a kid. My parents, they're divorced and like a good single dad, he would bring me to F.A.O.

8:01Schwartz. Of course, on Fifth Avenue. Yeah. And it was beautiful. They had the big, big clock in the middle of the store. It was very artsy. And he even arranged it. So I got taken to like a private room and they would show, you know, some new toy models. And he was, you know, he bought as many toys as he could to make up for all the various stepmoms and girlfriends that he brought into my life and then mysteriously vanished. Well, did you get to play the Tom Hanks piano? That's what everyone wants to know, right? I did. And I was just as good as that as I was as a regular piano. So, you know, I think I got a Yankee doodle in there.

8:43But I remember as a kid, F.E.O. Schwartz was the number one place to be. James, what about you? What was your toy shopping experience growing up? It was sort of multifold. There were Sunday mornings that I can remember going with my mom and maybe some of my aunts, and they would go to a store called Zare, if you remember that. I remember Zare. Yeah, it was kind of like Kmart, but not really. Yeah, it was a discount big box retailer of the day, and it sort of peaked in the late 70s, early 80s. We would go there on Sunday mornings looking for the new Star Wars figures or G.I. Joe or whatever. And a couple other places, of course, Toys R Us became a gigantic haunt.

9:28That was the place you wanted to go. And then a couple years later, right across the street, another place opened called Child World, the Children's Palace that had like turrets, looked like a castle. That one didn't last very long. And then you had the mall spots like KB and stuff. But there was always a lot of toy shopping going on. And, you know, there was mention of Big, the Big Piano here. Sometimes I think that I'm Josh Baskin in real life. I get to look at this stuff and sometimes say, I don't get it. There's nothing fun about a building. Well, I used to sort of go to toy stores just for the vibe.

10:06I mean, it was fun to talk toys with other kids. Did you ever have that experience? Not so much talking toys with other kids at the toy stores. I think it was at the time it felt like there were more grownups around than kids when you'd go to the toy stores, probably because they were buying stuff for their kids at the time. Now that's changed. A lot of them are shopping for themselves. But, you know, there was there was a lot a lot to look at. It felt like a magical experience. Miles of aisles. Miles of aisles, indeed. There weren't miles of aisles, I don't suppose you could say, at FAO Schwartz.

10:40You sort of overwhelmed John Marco when you go into a store like that. But you mentioned you grew up in Baltimore. Was that the era where you still had mom and pop toy stores around the corner or not so much? Not really. Honestly, where I actually grew up, there was a there was like a Japanese toy store that I was really into. And they had a lot of build your own models of like anime figurines. and they looked so impressive on the box. But when you opened it, the amount of construction was immense. And to make it look like it did on the cover, you'd have to paint and put these tiny stickers on very precisely.

11:23And they cost an absurd amount of money. So I bought a couple and then I really got to see that I like my toys to be fully constructed and painted when I purchased them. You know, I don't know if any listeners have picked up on this yet, but I noticed that none of us yet have talked about the store that used to be known as the King of Toys, a place with a clout and power to bully toy makers themselves. Well, that's coming up on the Best of Business Wars Daily.

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13:27Hey, welcome back to the best of Business Wars Daily. Joining us, James Zahn, editor-in-chief at The Toy Book and senior editor at The Toy Insider and comedian John Marco Soresi. We started our program talking about toy stores, those we remember from growing up, but now we're going to talk about the chain that once ruled the industry and is trying to make a comeback. You know the one, Toys R Us. Let's listen to a recent clip from Business Wars Daily. Once upon a time, Toys R Us controlled more than 25 % of the toy market worldwide and had roughly 800 stores in the U.S. alone. After years of struggle and mounting debt, the company finally closed the last of those stores five years ago after filing for bankruptcy.

14:10Two acquisitions later, the brand is now owned by WHP Global, a management firm that acquires and revives brands. WHP struck a deal with Macy's two years ago to open Toys R Us stores within Macy's locations, giving the toy seller a renewed retail foothold and opening a flagship store at the American Dream Mall in New Jersey. Well, now the company has announced plans to open two dozen more stand-alone Toys R Us locations in the U.S. next year. WHP will also open additional Toys R Us stores in airports. It's a move filled with nostalgia for those of us who saw a trip to Toys R Us as one of the best days of the year when we were kids, or for those of us who used the toy-filled wonderland as a place to keep our own children occupied for an hour or two on a rainy day.

14:57While some are rejoicing over the return of Toys R Us, others are taking a dimmer view. After all, if they couldn't make a go of it a few years ago, why would it work now? As Retail Dive wrote about the brand's comeback plans, quote, welcome back Toys R Us. Your market is tougher than ever, end quote. James, what do you think, since you cover the industry here, why do you think the folks behind the Toys R Us revival think this comeback is going to work? The Toys R Us folks now, it's an interesting bunch of people. WHP Global is very well funded. They own a lot of fashion brands, actually, and they've really been working hard at figuring out how they can keep this iconic storied retail brand alive in new ways.

15:46And I think the Toys R Us saga is a lot like an onion. The more you unpeel it, there's just more and more layers to it. Do you know it was 2017 was the last year with the real full Toys R Us that had been around for 70 years. 2018, it went bankrupt. They all closed. Late 2018, Some folks tried to keep the brand alive, doing this Jeffrey's Toy Box thing that was just sprinkling toys in other retailers on pallets. Then WHP came in, and also there was another entity called True Kids Brands. They opened two concept stores, one in New Jersey, one in Texas. And then the pandemic happened. So those stores closed.

16:29So they had to regroup again, and they struck this partnership with Macy's. and they have done all these departments in all of the Macy's stores. And what's unique about them is that the experience varies widely. You could have a flagship location like Herald Square in New York or State Street in Chicago that is just a gigantic, magical place. Or you can have your suburban mall and it's just sort of a little department in the corner. Yeah. But now what they're doing here is they're really positioning Toys R Us as like a licensing play. So the flagship store that they already have at American Dream, that's operated under license by a company called Toys for You out of Brooklyn.

17:14The new flagships that they are opening are in partnership with a company called Go Retail Group that already has an infrastructure to operate mall stores. They've been doing it for years. They're doing an airport store. The first one's at Dallas Fort Worth, and that's in partnership with Duty Free America. So what I think they've done smartly here, because they couldn't replace that background infrastructure, shipping, logistics, all of that, that they lost when the company disappeared. They're now able to sort of piggyback on top of that. for Macy's, they're using the Macy's distribution channel.

17:52And for these other ones, they're dealing with people that know how to do this stuff in various spots. And so far, knock on wood, it appears to be working. You know, John Marco, I was listening to James talking there and thinking, did he just say airport? And I'm thinking, a Toys R Us at an airport, is that not a parent's worst nightmare? Well, let me tell you this. Speaking of my single father again, he would go to New York sometimes. And on the way back, he'd always want to give me a little toy so that I never asked to spend all the time at my mom's house. And I can see you coming home from a long business trip and you go, oh, my God, I forgot to buy a toy for my son.

18:37I'm going to lose custody. And then boom, right there, you can buy an overpriced giraffe toy that can barely fit in the overhead compartment. And I don't know. I think it I think it could work. Or a screaming monkey with a little symbols that you can take on the plane and keep everyone up on the red eye. Yeah, I love that. James, whose toys are us up against here? I mean, who's who seems to be ruling that brick and mortar toy selling space? So it is an interesting landscape now because that void that was left when Toys R Us went away so suddenly, that holiday season in 2018, there was a mad rush from all these different retailers to try and get some of that market share.

19:20And at the time, Target won. All the big boxes tried to extend their selection or their floor space. Target redid their toy departments, made them fun, made them engaging. Now, John Marco, we're talking about FAO Schwartz. Target is in bed with FAO Schwartz. So you can go to FAO's new flagship in whatever, 30 Rock in New York, and they have toys from Target's hot list in their store. Conversely, Target stores are selling FAO branded toys, including plush and stuff. So they sort of work together and that's their whole deal. Now you got Macy's tied up with Toys R Us. You've got all of those happening.

20:05So the big boxes were winning. But there's two other challengers in play. First, believe it or not, farm and ranch stores. Farm and ranch stores. Rural America. Rural America. Think like Tractor Supply, how they're popping up all over the place. They're bringing toys to markets where it's hard to get. Hard to get stuff out there. And then also the value channel. Think of like all the Dollar Generals. They have 10 ,000 stores. So they're getting toys out to people like that. But the other one, good, old-fashioned, independent toy stores. There are still thousands of them. They're organized. These toy stores, they're really community-focused.

20:48And these managers are using platforms like TikTok and stuff to show off their new wares. And then they have stuff go viral. And what's cool about it is that the viewers on TikTok might not be able to visit a store, say, in Alabama, but they now know about that toy and they're going to seek it out wherever they live. So it's really evolving. Yeah, this really is a different kind of revival. But Toys R Us and its return, I wonder if we might ever see KB come back from the dead. James, do you have any line on that? So a few years ago, there was a guy that had attempted to relaunch KB Toys, Elliot Kassoff.

21:32He had purchased or acquired some of the dead brands and the dead IPs that were linked to KB Toys. So right about the time Toys R Us took a dive, this guy came in and tried to resurrect KB as a mall store again. And there was a lot of hype for it for about a year. And then all of those plans either collapsed or just failed to materialize. And I heard it boiled down to what it always boils down to, funding. There wasn't enough funding to make it happen. John Marco, what do you think? Do we really need toy stores these days, or has the internet taken care of our needs? oh i i i think we long for an experience of roaming the aisles of a toy store i loved i was super into wrestling and i just loved action figures and i even now i i if i came home with some action figures my girlfriend i i think she'd be upset we live in a very small new york city apartment and i have enough merch filling up every corner but i love when i go to a mall and i'm headlining a mall i love to walk in the toy store and just look at all the action figures and dream of the days that I'll be single again and I can fill my apartment with action figures.

22:45So I really love the physical experience of walking around and seeing it all displayed. Action figures, really? Which ones? Oh, I love them all, but I love Dragon Ball Z, all anime and wrestling. And I just love seeing how advanced they've gotten. Because when I was a kid, Power Rangers, it was such a big deal. They had the regular head, you press their belt and it flipped into their helmet head. The listeners can't see how much I'm gesturing to show how this is being done. But my father, he would unscrew all the action figures and he made them all Rainbow Rangers. So I had all these Rainbow Rangers at home that felt like a special thing that no one else had.

23:29And I love them. I love action figures. Well, we are talking with comedian Gianmarco Cereci and toy expert James Zahn. and coming up we'll talk about that intersection between entertainment and toys and a whole lot more on the best of business wars daily stay with us

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25:50Hey, welcome back. I'm talking with comedian John Marco Soracian, toy expert James Zahn. Now, I have to ask you, John Marco, did you see the Barbie movie? And more importantly, did you wear pink? Well, I do wear pink. I feel like I saw the Barbie movie on Twitter in 20 Second Bites. So many clips were put online that, to be honest, I didn't feel the need to see it. So I'll wait till it's on an airplane. Every time I fly, I check to see if it's there. Wait a minute. You haven't seen it yet? Really? So if on Twitter they were putting, I mean, truly like 30 clips. I feel like I've seen the whole movie.

26:30James, how about you? Did you dress up to see the film? I did not dress up to see the film, but I'm going to back this up and say, you know what? Those clips on Twitter, that wasn't the whole movie. It's quite surprising. It is a very surprising film. And I took my daughters and my wife and we went to an old school downtown two screen cinema in Antioch, Illinois. We watched it and the place was packed and people were dressed up. I was not dressed up. But if I had something pink, I would have worn it. But I just didn't have it. The movie event in our family was the Barbie movie. And my daughter was so excited about it in the run-up, and in fact, it came out on her birthday.

27:14So you can bet this was going to be a whole big thing. They all came home, she and her friends, you know, they'd had a grand old time. But you know who I wasn't hearing the end of? All of them were talking about Ken, not Barbie. What's up with that? Ken sort of stole the show, as I understand it, or maybe that's just this crowd. Anyone else picking up on that? I mean, you keep saying Ken. I think what you mean is Ryan Gosling. Oh. I'm just kidding. Where I see love, she sees a friend. What will it take for her to see the man behind the tent and fight for me? James, do you know what that was about?