Toys R Us’ last two stores in the U.S. are closed for good

Toys R Us has closed the only two stores it had left in the United States.

The iconic toy retailer made the decision as a result of the hardships brought on by the Covid pandemic and plans to shift resources toward opening new locations where there is better shopper traffic, a spokesperson told CNBC in an emailed statement.

“Consumer demand in the toy category and for Toys R Us remains strong and we will continue to invest in the channels where the customer wants to experience our brand,” the person said.

Toy sales in the U.S. surged last year by 16% to $25.1 billion, market researcher The NPD Group reported Monday, as families turned to toys to keep kids occupied during the health crisis. But a substantial share of those sales has moved online.

Tru Kids, an entity that acquired Toys R Us’ intellectual property during its liquidation in 2018, opened two smaller-format stores in late 2019: One at Unibail-Rodamco-Westfield’s Garden State Plaza mall in Paramus, New Jersey, and a second at Simon Property Group’s The Galleria in Houston. The Houston location closed on Jan. 15, the spokesperson said, while the Paramus location shuttered on Tuesday.

Representatives from URW and Simon did not immediately respond to CNBC’s requests for comment.

Tru Kids is still running Toys R Us’ website, which ultimately sends customers to Amazon to complete a purchase after marketing them toys. It also continues to license the brand globally.

Many consumers have steered clear of brick-and-mortar stores during the pandemic and instead have been buying more online. Mall-based retailers have suffered exceptionally. It likely will take some time for shoppers to adjust to heading back to malls, and one retail research firm is predicting there could be as many as 10,000 store closures announced by retailers in the U.S. this year, which would set a record.

Bloomberg first reported on the Toys R Us closures on Friday.