Babies R Us returns with new flagship store featuring stroller test track

Beloved brick-and-mortar stores are returning with a makeover, putting an emphasis on "experiential" shopping.

Babies R Us opened a physical store in the U.S. this week at the American Dream mall in New Jersey, its first since the brand and its corporate parent Toys R Us filed for bankruptcy in 2018.

Tru Kids purchased the Toys R Us brand, including Babies R Us, in a 2018 liquidation sale, but the attempted resurrection came amid the COVID-19 pandemic, causing the new locations to falter.

Both Babies R Us and Toys R Us were acquired by brand management firm WHP Global from Tru Kids in March 2021. By the end of the year, the Toys R Us flagship was opened, also at the American Dream mall. Through 2022, WHP Global opened more than 400 Toys R Us shops within Macy’s stores and is available through the department store’s website.

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A New Focus

The company’s new flagship Babies R Us store will reintroduce the brand to consumers and attempt to lure shoppers with a physical presence. The store features a build-your-own nursery section, a test track for strollers and a dedicated registry space.

"We are opening our doors to parents-to-be and saying, ‘Come on in and go on the journey with us,’" WHP Global CEO Yehuda Shmidman told FOX Business. "Sit down, talk to experts, let's build a registry together. Let's take out a couple of strollers and take them for a spin on the stroller track. You can't do that on the internet."

Babies R Us will have a digital presence to allow for online shipping, but the combination of online and a one-stop shop experience is "one of a kind," Shmidman said. The 10,000-square-foot store is located in America’s ultimate destination mall and experiential mecca, equipped with indoor amusement parks, a water park, a miniature golf course, an aquarium and North America’s first and only indoor ski and snow resort.

The new store invites new and expecting parents to test out an array of products like strollers and car seats. The stroller test track features real-life terrain like grass and sidewalk steps for shoppers to get a sense of pushing a stroller in different conditions and environments.

Just behind the test track, shoppers can sample car seats strapped to a seat from inside a car. Other baby goods for sale include clothes, blankets, accessories, formula products and more.

The return comes as rival Buy Buy Baby is closing all its retail stores and liquidating following the bankruptcy of parent company Bed Bath & Beyond. Shmidman sees it as a billion-dollar market share opportunity to grab and build from there.

Analysts say the retail landscape is still an uphill battle.

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Moody’s Investors Service is predicting a rise in retail debt defaults as consumers get squeezed by personal debt. Over the next 12 months, Moody’s anticipates defaults among retail and apparel to jump from 6% to 8.6%. Companies like Rite Aid, At Home and Premier Brands Group and department store Belk are subject to the most vulnerability, per the report.

"Weaker, highly leveraged companies continue to have a tough time accessing capital in a market where investors remain risk averse," Moody’s analysts said in the report.

Since the start of the pandemic, popular mall retailers and anchors have filed for bankruptcy, including Bed Bath & Beyond, Modell’s Sporting Goods, Lord & Taylor and Neiman Marcus.

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Despite the looming economic threats, the Babies R Us brand is betting on a consistent customer base. Shmidman says he believes it is a robust business with or without the volatility of the macroeconomy.

"When you look at the data over time, there are two areas in particular that are recession proof," Shmidman said. "They are babies and pets. People are not slowing down because they are always taking care of their kids."