TORONTO – Toys “R” Us Canada is entangled in at least seven lawsuits, filed by landlords claiming they are collectively owed $31.3 million in unpaid rent and other damages from the struggling retailer. These legal actions stem from allegations that the toy store chain did not pay rent for several properties in the years 2024 and 2025, prompting the landlords to pursue lawsuits in Ontario court.
The lawsuits involve properties owned by well-known landlords such as RioTrin Properties, part of the RioCan Real Estate Investment Trust, and Calloway Real Estate Investment Trust. The locations affected include areas in Saint John, New Brunswick; Belleville, Ontario; and Oakville, Ontario. In recent years, Toys “R” Us Canada has closed many of the relevant stores and reduced its retail presence to around 40 current locations.
While the claims have not yet been adjudicated in court, experts highlight the evident struggles of Toys “R” Us Canada, considering the many closures over recent years. Jenna Jacobson, director of the Retail Leadership Institute at Toronto Metropolitan University, emphasizes the uncertainty surrounding the brand's future, questioning whether it will survive primarily as a physical retailer or shift to an online format.
The challenges facing the company are compounded by the accelerated transition toward online shopping, increased competition from major players like Amazon and Walmart, and a trend among Canadian consumers to reduce spending. Jacobson notes that while the toy retail sector isn't collapsing, it is facing increasingly complicated dynamics.
Real estate costs further burden retailers, being one of their highest expenses. When customer traffic declines or stores perform poorly, meeting lease obligations can become unmanageable. Court documents reveal that after Toys “R” Us Canada failed to pay rent for the first time, landlords notified the chain that continued non-payment could result in the termination of their leases. When the unpaid rent continued, the landlords moved to terminate leases and sought legal action.
Many landlords specify in their lawsuits that they are owed more than just one month of unpaid rent. Lease terms typically required Toys “R” Us Canada to pay the following three months' rent upfront along with any missed payments if they missed a payment. Additional fees or expenses, such as costs for store signage removal, were also cited in some cases.
Toys “R” Us Canada has yet to submit a formal response in many instances but has claimed that some landlords were aware of impending store closures, as liquidation signs were visibly posted at their properties. The retailer contends it offered many landlords potential replacement tenants, but these offers were reportedly declined.
Similar patterns have emerged in other locations, with reports indicating that Primaris and QuadReal Property Group are terminating leases at Stone Road Mall in Ontario and Willowbrook Shopping Centre in British Columbia, respectively, due to unpaid rent issues. Notably, all six Toys “R” Us locations in Primaris's portfolio have closed, although the president of the company did not confirm whether unpaid rent was a contributing factor.
The retailer is currently managed by Putman Investments, based in Ancaster, Ontario. This firm, known for acquiring entertainment retailers like HMV and Sunrise Records, purchased Toys “R” Us and Babies “R” Us Canada in 2021 from Fairfax Financial Holdings. At the time of acquisition, Toys “R” Us Canada operated 81 stores. Fairfax had initially bought the companies for $300 million in 2018, coinciding with the American division’s bankruptcy filing. CEO Doug Putman has expressed enthusiasm for turning around the struggling businesses, claiming to have numerous innovative ideas to revitalize the brands.
Putman previously integrated sections of Toys “R” Us stores to host HMV departments and secured $120 million in financing from Gordon Brothers in late 2024. More recently, renovations introduced Playlab, a space for arts, crafts, and indoor play within certain stores. Retail strategist Lisa Hutcheson believes that the addition of experiential elements, like those in Wonderlab and HMV, could attract customers, unlike traditional toy displays which are easily replicated online.
However, other brands that Putman has tried to incorporate, such as Northern Reflections and Ricki’s, may not have aligned as seamlessly with Toys “R” Us Canada, leading to speculation about their effectiveness. Jacobson has noted that frequent closures suggest that the retailer's varied approaches have not yielded the desired results.
Moreover, recent developments indicate wider challenges across Putman’s business ventures. Rooms + Spaces, a home goods chain opened in 2023, has also closed, along with T. Kettle, which had operated in former DavidsTea locations until its closure in December. Furthermore, Everest Toys, where Doug Putman serves as vice-president, faced receivership initiated by TD Bank due to severe financial difficulties, including a $25 million debt.
As of October 2026, Toys “R” Us Canada has reportedly experienced additional setbacks, including a data breach affecting customer information and the suspension of online sales. The company announced that this pause was meant to allow for improvements to their online shopping functionalities, promising a return to online sales by mid-February. Jacobson noted that this unusual move likely reflects deeper operational challenges than merely a website upgrade.
