Toys R Us investors look to resurrect brand

There may be a second act for Toys R Us, the retail wonderland for children that turned off the lights at hundreds of stores for what was thought to be the final time this summer.

After the toy chain joined the parade of retailers that never recovered from the recession and the radical changes in the way Americans shop for toys and everything else, a group of investors is planning a comeback for iconic mascot Geoffrey the giraffe and his crew.

The group, made up of secured lenders, said in a bankruptcy court filing Tuesday that it's scrapping an auction for Toys R Us assets despite having received a number of qualified bids.

The hedge fund group that held the auction now believes it stands a better chance of realizing a return on its investment by potentially reviving the toy chain rather than selling it off for parts. The group will attempt to establish a "company that maintains existing global license agreements and can invest in and create new, domestic, retail operating businesses under the Toys 'R' Us and Babies 'R' Us names."

The investors said they will work with potential partners to develop new ideas for stores in the United States and other countries "that could bring back these iconic brands in a new and re-imagined way."

Toys R Us suffocated under a staggering $5 billion debt load before liquidating its U.S. business this year. A leveraged buyout hobbled the company, and hundreds of stores were shuttered in June.

In addition to the debt that it was saddled with by its private-equity owners, Toys R Us found itself in a battle to its seeming death with Amazon.com and other big toy sellers such as Target and Walmart.

The current asset holders did not go into detail about how the company, which maintained its headquarters in Wayne, New Jersey, would thrive in such an environment.