Toys “R” Us Canada is facing yet another legal battle, this time from a landlord who claims the retailer owes rent. The situation is a complex web of leases, unpaid rent, and legal disputes, and it's a story that's been unfolding over the past year.
The Rent Dispute
RioCan Holdings Inc. has filed a lawsuit against Toys “R” Us Canada, alleging non-payment of rent for a store located at the Lawrence Allen Centre in Toronto. According to court documents, the toy store chain failed to pay rent for the month of January, prompting RioCan to terminate the lease on January 20th.
This is not an isolated incident. Last month, it was reported that Toys “R” Us Canada was facing seven other lawsuits, all claiming unpaid rent and other damages totaling over $31 million. The latest lawsuit adds to the growing list of financial troubles for the retailer.
A Troubled Retailer
Toys “R” Us Canada, which was purchased alongside Babies “R” Us by Putman Investments in 2021, has seen a significant decline in its store count. While it once boasted 81 stores, its website now lists only 40. Media reports suggest that some of these listed stores have either been shuttered or are facing eviction notices due to unpaid rent.
The company's financial struggles are further evident in its online listings, where some of its properties have been put up for sale for as little as $1. Additionally, equipment from its headquarters in Concord, Ont., was auctioned off just before Christmas, indicating a potential liquidation of assets.
The Legal Battle
In the latest lawsuit, RioCan is seeking approximately $4 million from Toys “R” Us Canada, which includes the missed January rent payment of roughly $43,000, as well as other obligations outlined in the lease agreement. The lease covered a substantial area of 15,580 square feet and was set to expire in 2035, but RioCan had the right to terminate if rent payments were missed and not remedied within a specified timeframe.
Many of the leases involved in the other lawsuits against Toys “R” Us Canada contain similar provisions, highlighting a pattern of non-payment and lease terminations. One such lawsuit was filed by RioCan Holdings and its affiliate, RioTrin Properties, alleging non-payment of rent at two locations: Brentwood Village Mall in Calgary and RioCan Centre Belcourt in Orleans, Ont.
While RioCan dropped the Brentwood claim, RioTrin continues to pursue the Belcourt allegations. Toys “R” Us Canada has requested that the Belcourt case be dismissed, stating that it had notified RioTrin in advance of the store closure and even presented a potential replacement tenant to take over the leases. However, RioTrin refused to assign the leases to the proposed tenant.
A Web of Companies
Putman Investments, the owner of Toys “R” Us Canada, is based in Ancaster, Ont., and is also behind several other retail brands, including HMV, Sunrise Records, and more. During the holiday season, the company closed all of its T. Kettle stores, and prior to that, it shuttered a short-lived home goods venture called Rooms + Spaces.
Interestingly, Everest Toys, a sister company started by the father of Putman Investments' leader, Doug Putman, was forced into receivership last year, adding another layer of complexity to the corporate structure.
This ongoing saga raises questions about the future of Toys “R” Us Canada and its ability to navigate these legal and financial challenges. As the lawsuits pile up, the fate of the retailer and its remaining stores remains uncertain.
And this is the part most people miss: the impact on employees and communities. With store closures and potential job losses, the human cost of these business struggles is often overlooked.
What are your thoughts on this complex situation? Do you think Toys “R” Us Canada can turn things around, or is this the beginning of the end? Feel free to share your opinions in the comments below!
