In this video, I interview Jeff Edison, co-founder and CEO of Phillips Edison & Company. Jeff explains what went wrong with Toys R. Us and how to fix it.
Phillips Edison & Company, Inc., is an internally-managed REIT. It is one of the nation’s largest owners and operators of grocery-anchored shopping centers. Its diversified portfolio of well-occupied neighborhood shopping centers has a mix of national and regional retailers selling necessity-based goods and services, in strong demographic markets throughout the United States. PECO provides asset management and property management services to 338 shopping centers – 303 of which are wholly-owned comprising 34.4 million square feet across 32 states. PECO’s proven, vertically-integrated operating platform allows it to effectively and efficiently acquire, lease and manage its properties, resulting in a history of strong operating results and great shopping experiences.
This wasn’t my first interview with Jeff, having interviewed him 3 times over the last 9 years. He is genuinely, one of my favorite interviews.
During this interview, Jeff and I discuss the Toys R US debacle and our thoughts on what they did wrong and how they could have capitalized on the changing market.
Jeff explains that Toys R Us did little more than place toys on shelves. They were discounters in a world that was becoming more competitive on price. They couldn’t survive competing with the likes of Amazon or Walmart. You’ve likely heard this before, but for retail real estate, it is about convenience or experience. Toys R Us didn’t provide the experience.
As he was talking to me, I realized how right he was and what Toys R Us could have done better and what they may be doing. It is so obvious to me now. Their stores should have a play area; perhaps baby or kid sitting where parents could drop off their kids to play with the new toys, while the parents shop in the mall. What do you think the kids are going to do when the parents come back? “Mommy I want this toy”.
Not only should that generate more revenue in the store from an experience that can’t be reproduced online, but it will bring more shoppers into the malls. It’s a win-win for mall owners and retailers, alike.
The interesting thing about our discussion is that Toys R Us has just announced that they are being reborn. The current owner of the brand describes the new stores as a “highly engaging retail experience. The new Toys R Us will have “Interactive and playground-like environments.” It sounds like someone was listening to Jeff and I.
The author:
Howard F. Kline is a Nevada licensed real estate advisor with SVN The Equity Group, located in Las Vegas Nevada. He has also been a licensed California attorney for over 42 years, primarily focused on commercial real estate and has been a licensed California broker and a licensed New York real estate agent. He is also the founder and host of CRE Radio & TV, an online commercial real estate magazine since 2010 and recently founded the Las Vegas Business Journal, an online, media rich, interactive business magazine. For more information, contact Howard at 702.706.4433 or at howard.kline@svn.com.