Like a plush version of the mythical bird the phoenix, Toys ‘R’ Us Canada has risen from the ashes of a bankruptcy filing triggered by the failure of its U.S. parent.

The Canadian Toys is rising with a renewed focus on customers and on so-called omni commerce, a melding of bricks and mortar with online retailing.

“That’s the secret sauce, “ said Melanie Teed-Murch, a former Toys ‘R’ Us store manager in Kitchener who advanced through the ranks to become president in 2016 of both Toys ‘R’ Us and Babies ‘R’ Us Canada. “We really aspire to bring technology enhancement to the physical experience.”

She said there is no replacement for the delight a child and parent feels as they enter one of the company’s more than 80 stores across the country. But the experience can be made more exciting and convenient when store displays are enhanced by digital monitors and staff are equipped with mobile iPods and tablet assistants.

Teed-Murch said parents and grandparents can also use mobile pay at the checkout, or even in store aisles through mobile wallet app technology, while staff can provide live chat assistance to help shoppers find inventory online.

“Digital commerce brings the assortment and breath,” she said, adding that Toys ‘R’ Us plans to invest significantly in its digital operations in 2019.

The company is experimenting with new-look stores where shelves are knee high and children's sight lines are unimpeded. It has also signed up more than 600,000 members to its opt-in loyalty program, which offers advance information on the latest hot toys while gleaning customer data to better target marketing — data that she said is not sold.

It also relies on a small group of “influencers,” mothers from cities across Canada who command large Facebook and Instagram followings to provide ongoing feedback to senior management.

Toys ‘R’ Us Canada sought protection last September under the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice in a proceeding parallel to the filing of its U.S. parent, the once-dominant specialty retailer to postwar baby boomers that sank under a debt load from a previous buyout and competition from warehouse and online retailers.

The retailer in March said it intended to liquidate its U.S. business and shutter all of its 735 domestic toy stores and Babies ‘R’ Us stores, although Toys ‘R’ Us operations outside of the U.S. and Canada, including about 255 licensed stores and joint venture partnership in Asia, which are separate entities, were not part of the Chapter 11 filing.

While the U.S stores were closing, however, the Canadian unit was being acquired by Toronto-based Fairfax Financial Holdings after a lone bid of $300 million, with the deal completed in June.

As a value investor Fairfax says it was drawn to Toys ‘R’ Us Canada by its solid financial performance over the past decade that saw it generate more than $100 million in operating earnings and $1 billion in sales year over year. In contrast, the U.S. business posted a $164 million (U.S.) net loss in the quarter preceding its bankruptcy filing on a 4.1 per cent drop in same-store sales.

“Canada is different,” said Fairfax president Paul Rivett. Whether for reasons of climate, geography or temperament, he said consumers here continue to embrace the in-person shopping experience, even while online commerce has forced a wave of insolvencies among bricks and mortar specialty retailers in the U.S.

As such, Teed-Murch says Toys ‘R’ US intends to emphasize its homegrown identify and to compete strongly in a Canadian market that has held up better than its U.S. counterpart amid demographic trends and the growth of online retailers including Amazon and Walmart. “We’re here: our shelves are stocked with the hottest toys and newest baby products,” she said in an interview.

And while the last few years have been tough for the global toy industry, “the Canadian market managed to outpace many other global regions thanks to a boost in e-commerce spending and the strong performance of several Canadian toy companies,” Michelle Liem, former director of toys, video games and movies at market research firm the NPD Group, said in a 2017 report on the global industry’s performance.

“Canadian companies like Spin Master and WowWee [founded in Canada, but headquartered in Hong Kong] made strong contributions to the market with top selling toys including Hatchimals and Fingerlings, which helped contribute to the overall strong growth of the Canadian toy industry.”

Now that it has emerged from protection, Toys ‘R’ Us Canada has time to execute a reboot of the iconic brand, with the company aiming to expand its retail footprint and add jobs rather than retrench, Rivett said.

“It’s a fantastic business. We’re pinching ourselves that we were able to get it,” he told the Star, adding that the company’s roughly 22 owned stores represent a value greater than the purchase price. He also said while Fairfax has eyed some of the shuttered Toys ‘R’ Us stores stateside, no deal is in the offing.

Rivett said Toys “R” Us Canada continues to generate free cash flow from operations to fund capital investment to improve digital offerings and revamp bricks and mortar outlets, particularly now that it no longer needs to funnel royalty payments to the U.S. parent.

He said Fairfax is building for the long term and allowing the Toys ‘R’ Us team in Canada to reinvest in the business instead of the history of sending earnings to the U.S.

He said Fairfax’s aim is to let senior management implement a stand-alone strategy similar to the approach it took after acquiring certain Canadian assets of British multinational facilities management firm Carillion in February and when Fairfax, along with CI Investments, agreed in 2016 to buy retailer Golf Town from the chain’s U.S. parent, a unit he said also represented a viable business in Canada.

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Rivett said Toys ‘R’ Us Canada, meanwhile, has faced challenges as it seeks to dispel confusion about its status as a going concern resulting from the eight-month bankruptcy process. But sales have not fallen off as consumer traffic remained strong in a comparatively healthy Canadian economy.

Teed-Murch also noted that while the baby business continues to decline in light of Canada’s low birth rate, the business remains valuable in that it allows a connection to a young generation of parents that the company hopes will rely on Toys ‘R’ Us as a trends authority when it comes to products and services for children.

And while the Fairfax deal frees the company from financial obligations to the U.S. parent and gives it access to Fairfax investment capital, it also puts the company, which employs about 4,000, entirely in Canadian hands and lets it adopt in-store engagement concepts that could include kids’ birthday parties, scavenger hunts and partnerships with apparel makers and food service providers.