By: Jonathan Raymond
(RNN) – Hold the play phone on the demise of Toys R Us.
A planned bankruptcy auction for the once-giant retailer’s intellectual assets – everything from the very name of Toys R Us to the image of Geoffrey the Giraffe – has been canceled, according to Reuters.
The consortium of major lenders to the bankrupt company has instead decided to try to revive the brand.
Reuters cited a court filing for its report.
The lenders, according to the report, “aim to open a new Toys R Us and Babies R Us branding company that maintains existing global license agreements and can invest and develop new retail shops.”
Toys R Us announced it was effectively ceasing operations in March, and in June closed the last of its stores.
It filed for bankruptcy last year. A private equity consortium led by KKR Group and including Bain Capital made a leveraged purchase of Toys R Us in 2005, and the company struggled under the debt used for the buyout. The company's debt payments were as high as $400 million a year, and were particularly crushing when the recession hit in 2008.
Meanwhile, the Washington Post reported on Monday that former employees will soon be getting severance payments out of a fund set up by KKR and Bain, in a rare bankruptcy victory for workers.
A representative from an industry labor group, Rise Up Retail, told the paper, “Bain and KKR made an investment that resulted in a lot of harm for families and communities, and the responsible thing to do is step up and pay workers what they are owed.”
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