Toys "R" Us Canada is currently embroiled in at least seven lawsuits filed by various landlords, collectively claiming an outstanding sum of $31.3 million in unpaid rent and other damages. These lawsuits, filed with an Ontario court last year, cite the retailer's failure to pay rent for multiple properties it occupied throughout 2024 and 2025.
The landlords involved in these disputes include notable real estate companies such as RioTrin Properties, a part of the RioCan Real Estate Investment Trust, and Calloway Real Estate Investment Trust. The properties at the center of the lawsuits are located in Saint John, New Brunswick; Belleville, Ontario; and Oakville, Ontario. As part of ongoing operational restructuring, Toys "R" Us Canada has vacated many of the locations mentioned in the lawsuits and has closed dozens of additional stores, reducing its presence to approximately 40 locations.
The validity of the landlord claims remains unproven in court. A spokesperson for Toys "R" Us Canada did not provide information for this article, while legal representatives for the company have yet to respond to inquiries. Retail experts suggest that the company's gradual closures are indicative of its ongoing struggle in the market.
Jenna Jacobson, director of the Retail Leadership Institute at Toronto Metropolitan University, highlighted the uncertainty surrounding the retailer's future, questioning whether it will exist as a physical entity or solely online within a year. She emphasized the challenges facing Toys "R" Us Canada, including a shift toward online toy shopping, increased competition from e-commerce giants like Amazon and major retailers such as Walmart, and a general trend of Canadian consumers reducing expenditures.
The situation is exacerbated by real estate costs, which represent a significant burden for retailers. When store traffic declines or performance falters, the burden of lease payments can become overwhelming. Court documents from the recent lawsuits allege that after Toys "R" Us Canada failed to make its rent payments, landlords reached out to remind the company that future non-payment could result in lease termination.
Upon further failure to pay, landlords proceeded to terminate their leases with Toys "R" Us Canada, leading to the legal actions. Individual claims from landlords noted that compensation sought goes beyond missed rent for the initial month. Many lease agreements stipulated that if a rent payment was missed, the retailer had to pay the next three months' rent in advance, along with the late payment, and may also incur additional penalties for store signage removal.
Toys "R" Us Canada has not yet submitted a statement of claim in many of these cases, although in some instances, it has requested dismissals, arguing that landlords were aware of the imminent store closures, as they had already posted liquidation signs at the properties. The retailer also claimed it had offered potential replacement tenants to some landlords, who declined the offers.
Similar situations are unfolding at other locations, with media reports indicating Primaris and QuadReal Property Group are terminating leases held by Toys "R" Us Canada at locations such as Stone Road Mall in Ontario and Willowbrook Shopping Centre in British Columbia, respectively, due to unpaid rent. Primaris's president confirmed that all six Toys "R" Us outlets under his company's management have since closed, although he did not specify whether unpaid rent was a factor.
Toys "R" Us Canada is currently managed by Putman Investments, based in Ancaster, Ontario, which acquired the retailer in 2021 along with Babies "R" Us Canada. At the time of the acquisition, the retailer had 81 stores, following a previous purchase by Fairfax Financial Holdings for $300 million in 2018, around the time the American division of Toys "R" Us sought bankruptcy protection.
CEO Doug Putman expressed enthusiasm about revitalizing the brand, mentioning he had 100 innovative ideas, including hosting birthday parties and tea gatherings within stores. In an effort to enhance customer experience, Putman integrated HMV departments into Toys "R" Us locations and introduced Playlab areas for indoor activities and arts and crafts—backed by a $120 million financing package from Gordon Brothers.
Retail strategist Lisa Hutcheson noted that such initiatives provided customers with reasons to visit physical stores. However, the integration of other brands owned by Putman, like Northern Reflections and Ricki's, has been less effective. Recent closures and ongoing struggles signal that previous efforts to reinvigorate Toys "R" Us Canada have not yielded substantial results.
Additional challenges have emerged within Putman Investments, as its new home goods chain Rooms + Spaces has closed down, and T. Kettle—a tea shop initiative—also ceased operations earlier this year. Compounding these issues, Everest Toys, where Putman serves as vice-president, faced receivership due to significant financial difficulties, extending a debt of $25 million to TD Bank.
In further complications, Toys "R" Us Canada recently alerted customers to a potential data breach involving personal information, leading to the suspension of online sales. The company stated that this pause is intended to allow for performance improvements and enhancements to shopping features, with plans to resume online ordering by mid-February. Retail experts consider this move atypical, suggesting there may be deeper issues at play as the company attempts to stabilize its operations.
