Toys “R” Us Canada is facing at least seven lawsuits from landlords who say they’re collectively owed $31.3 million in unpaid rent and other damages from the struggling retailer.
Documents filed with an Ontario court last year claim the toy store chain failed to pay rent for several of the properties it occupied in 2024 and 2025, sparking lawsuits.
The spaces were owned by landlords as prominent as RioTrin Properties — part of the RioCan Real Estate Investment Trust empire — and Calloway Real Estate Investment Trust and include spaces in Saint John, N.B.; Belleville, Ont.; and Oakville, Ont.
Toys “R” Us Canada has since moved out of many of the locations at the heart of the lawsuits and shuttered dozens of other stores over the last few years, shrinking its footprint to just 40 stores by some counts.
The claims have not been tested in court. A Toys “R” Us Canada spokesperson said they had no information to share for this story, while lawyers representing the company and its CEO did not respond to requests for comment about this story.
However, experts say one needs to look no further than the widespread, gradual closures to realize Toys “R” Us Canada is struggling.
“The big question is whether in a year’s time Toys “R” Us is going to exist and whether it’s in a physical format or is it going to exist in an online format,” said Jenna Jacobson, director of the Retail Leadership Institute at Toronto Metropolitan University.
“What does the future of this company look like? Right now, we don’t know.”
Putting the company in jeopardy is a shift toward toy shopping online, increased competition from rivals like Amazon and Walmart and Canadians simply looking to cut back on purchases, Jacobson said.
“The toy retail business is not collapsing, but the dynamics are more challenging,” she said.
Real estate often only exacerbates the pressures because it’s one of the largest expenses retailers face and when traffic declines or stores underperform, lease payments can “become untenable.”
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Documents filed in most of the recent lawsuits alleged that once Toys “R” Us Canada didn’t pay its monthly rent for the first time, landlords wrote to the chain to remind it that failure to pay in the next few days could allow the real estate company to terminate the lease.
When Toys “R” Us Canada allegedly didn’t pay, the documents claim its leases were terminated by each of the landlords, which then sued the retailer.
Several of the landlords say in their individual filings that they aren’t just owed the first month of missed rent.
According to court documents, many of the store lease terms said that if the business missed a month of rent, it must pay its next three months’ rent upfront along with the late payment. In some cases, they would also have to pay an additional fee or cover expenses such as the removal of store signage.
Toys “R” Us Canada has yet to file a statement of claim in many of the cases.
In others, it’s filed one, saying the court should dismiss the matter because landlords knew it was about to close some stores because they had started posting liquidation signage at the property.
The retailer also said it offered many of its landlords potential replacement tenants but none of the firms took Toys “R” Us Canada up on the offer.
This pattern of events is playing out at other locations with media reports this month suggesting Primaris and QuadReal Property Group are ending leases Toys “R” Us Canada had at Stone Road Mall in Ontario and Willowbrook Shopping Centre in B.C., respectively over unpaid rent.
QuadReal did not respond to a request for comment. Primaris president Patrick Sullivan said in an email that all six Toys “R” Us locations in his company’s portfolio are now closed but did not say whether unpaid rent was a factor.
The toy store chain is currently being run by Putman Investments, an Ancaster, Ont.-based firm that had recently bought entertainment retailers HMV and Sunrise Records, when it made its 2021 purchase of Toys “R” Us and Babies “R” Us Canada from affiliates of Fairfax Financial Holdings Ltd. in 2021.
The retailers had 81 stores at the time. Fairfax bought the companies for $300 million in 2018, around the same time the American arm of Toys “R” Us filed for bankruptcy protection.
“We love buying businesses that we feel are undervalued. We love a good turnaround,” CEO Doug Putman told The Canadian Press when Toys “R” Us Canada came under his control.
At the time, he said he had a list of 100 “really great” ideas to implement at the retailer, including spaces to host birthdays and tea parties.
Eventually, Putman carved out sections of Toys “R” Us stores to host HMV departments and it was helped along by $120 million in financing it got from Gordon Brothers in late 2024. Last year, it remodelled some stores to introduce Playlab, an indoor play structure and space for arts and crafts, sensory activities and parties.
Lisa Hutcheson, a retail strategist with JC Williams Group, said Wonderlab and HMV made sense for Toys “R” Us Canada because they gave people a reason to visit stores.
“If it’s just rows and rows of toys, that’s not going to make a difference because I can just go online,” she said.
Other brands Putman owns and has tried to integrate into Toys “R” Us Canada — Northern Reflections, Ricki’s and Cleo — have not been as natural a fit, Hutcheson feels.
And they may not be working either.
“Based on what we’re seeing right now with a lot of closures, obviously, the retailer has tried various options and it hasn’t been enough,” said Jacobson.
Fractures have also formed in other parts of the Putman business.
Rooms + Spaces, a home goods store chain it opened in 2023 in properties left vacant by Bed Bath & Beyond, has disappeared. So has T. Kettle, a tea shop that Putman ran out of some former DavidsTea locations until it quietly closed in December.
The shutdown came months after Everest Toys, a Canadian toy distributor at which Doug Putman is vice-president, was forced into receivership by TD Bank. The business was started by Doug’s steelworker father Bob in 1992 but now owes the bank about $25 million.
TD said receivership was necessary because Everest was facing “deteriorating financial circumstances,” had seen its entire board resign and had failed to satisfy the terms of its lending agreements.
“It is rudderless and is no longer able to meaningfully work with the bank towards a mutually beneficial outcome,” the bank said in a factum filed in August.
By October, even more troubles had emerged. Toys “R” Us Canada emailed customers about a data breach that may have compromised their personal information, and more recently, the company paused online sales altogether.
A note on its website says the move is meant to give the company room “to improve performance and future shopping features.” It promises online purchasing will return in mid-February.
Jacobson said the pause is atypical for a retailer but could be the company trying to get a handle on its merchandise.
“It is being positioned as making website improvements. I think there’s probably more to it than that, but time will tell.”
