3/20/2018 For an update on this story – click here!
With the recent news that Toys “R” Us has filed for liquidation in the U.S., there’s been much discussion on what the future will hold for toymakers, the ever-changing retail landscape, and most importantly – the 33,000+ jobs currently at stake. While some are trying to craft a save that could keep the Toys “R” Us brand afloat in some manner (such as an investment group led by MGA Entertainment’s Isaac Larian – just one player in the mix), others are looking to the future by taking pages out of the past. Now things have gotten a little weirder as Ellia Kassoff of Strategic Brands, LLC has entered the fold with a bold claim: “We’re going to save the toy industry!” His plan? To resurrect KB Toys.
Kassoff is a nostalgia guy, something I can appreciate as someone who also has an affinity for retail history and can often be seeing wearing a Zayre t-shirt nearly 30 years after that company ceased to exist (I just wore it a couple of days ago). His company, Strategic Brands, first hit my radar some years back when they got into a legal tussle with Macy’s over a plan to revive another former retail name close to my heart as a kid who grew up in Chicagoland: Marshall Field’s. For those wondering how someone can swoop in and re-start a company that they were never affiliated with the first time around, it all comes down to trademark law. The simplest explanation: “use it or lose it” when it comes to valuable names. Some call these “Zombie Trademarks,” and the International Trademark Association published an excellent article back in 2016 that explains the process, citing Kassoff’s work as an example. During the Macy’s dispute, Strategic Marks was able to acquire several “legacy” brands, while Marshall Field’s remained under Macy’s ownership. As the ITA pointed out, “non-use of a mark for three consecutive years creates a rebuttable presumption of abandonment,” which opens the door for someone else to claim the trademark and use it for identical purposes.
In an announcement on LinkedIn, Kassoff wrote the following:
“As some of you know, our company Strategic Marks, LLC has acquired KB Toys about a year ago. During that period, we had been working on several models to resurrect the ‘Great American Toy Store’ and to make sure the stores can compete with Toys ‘R’ Us, other brick and mortar stores as well as on-line retail. Well, with the demise of Toys ‘R’ Us this week, we have now accelerated our business plan and hope to have our stores up and running before Christmas. We’re in discussions with many of the toy manufacturers, as we try to find out the best way to support them and the 20% loss of the US toy market due to the Toys ‘R’ Us liquidation. We believe we will have the infrastructure in-place and [hopefully] save the toy industry.”
Strategic Marks did indeed file for a trademark on the name “KB Toys” back in 2016. What’s interesting here is that the original KB Toys fell victim to the same vultures at Bain Capital, who loaded that company with debt and killed it in the same way that they’ve destroyed Toys “R” Us. Then, in 2009, Toys “R” Us acquired the KB portfolio of trademarks from Streambank, LLC for just over $2M, taking over the domain names and later using the KB Toys name on a series of budget-priced, house-branded toys and games (they were crap) labeled as K•B Classics. Along the way, KB had many variations of their name, including K•B Toys, K•B Toys Outlet, K•B Toy Works and Kay-Bee Toys. It will be interesting to see if Toys “R” Us still considers any of those to be assets in their liquidation, as I was able to find that KBToys.com, KBToyWorks.com and KBKids.com (which once had a $43M push behind it) are all still owned by Toys “R” Us and pointed to the TRU.com server (although unresponsive). Whether or not a dispute along the lines of Strategic Marks v. Macy’s will occur is anyone’s guess, but Kassoff is moving ahead with a new domain: http://www.kbtoysstore.com and has posted an open invitation for others to get involved via another note on LinkedIn.
Thus far, Strategic Marks, LLC has been successful in reviving the Leaf Foods brand along with several of it’s famous candies like Astro Pop. They’ve also relaunched Hydrox Cookies, and are eyeing several other classic properties as well. For a little more insight, check out this 2014 article from the Consumerist.
Can a new company that flies the banner of a classic toy store survive and thrive in 2018 and beyond? I’ll be watching this very closely, as I believe that there is a place for many toy stores, and that Toys “R” Us (and the original K•B) never had to die. Of course another iconic toy store is also making a comeback this year, with FAO Schwarz (also once owned by Toys “R” Us) set to open a new flagship location in addition to airport shops in partnership with Hudson.
Related: “Toy Killer – Is Bain Capital Positioning Toys “R” Us to be a Repeat of KB Toys?”
