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Party City Goes After Toys ‘R’ Us Leftover Business With Pop-Up Shops

June 25, 2018, 5:37 PM UTC

Party City (PRTY) is the latest retailer looking to get a boost from the Toys ‘R’ Us implosion.

The company said Monday it plans to expand an initiative to build stores in temporary, separate locations during the upcoming holiday season to also include 50 Toy City locations. Party City plans to roll out the so-called pop-up stores starting in September alongside its Halloween City temporary shops, continuing through the holiday season.

The expansion comes amid a big vacuum in the toy market left by the liquidation of Toys ‘R’ Us, which said in March it would go out of business.

The new Toy City concept will allow Party City to “capitalize on the category whitespace that has recently been created,” Party City CEO James Harrison said in a statement and garner sales in a product category it never offered in a connected way. Party City typically opens between 250 and 300 Halloween City pop-up shops every autumn.

Party City is hardly the only store chain going after the toy market now that the largest specialty toy retailer has gone under. Walmart (WMT), (AMZN) and Target (TGT) are going hard after this business as are non-traditional toy sellers like J.C. Penney, (JCP)which last holiday season opened its own stores-within-a-store to showcase toys.

Toys ‘R’ Us, whose last stores will close this Friday, after failing to find a buyer willing to revive it. Once the essential toy store, the chain eventually choked under billions of dollars debt stemming from a private-equity financed buyout, leaving it unable to compete with Walmart and Amazon by impeding its investment in better store presentation and in e-commerce. Though the chain shriveled in its final years, Toys ‘R’ Us still rang up annual U.S. sales of above $6 billion—spoils rivals are now fighting over.

For Party City, which in 2016 and 2017 reported declining comparable sales at its namesake brand, the move is a way to diversify its offering and test the waters of the toy market without making a capital intensive commitment of opening permanent stores. Indeed the company said the toy pop ups were possible in part because of ” and attractive leasing opportunities.”