Parents-to-be left in the lurch as Babies R Us closes, rivals look to lure baby registry customers

Key Points
  • An estimated 100,000 Babies R Us gift registries face an uncertain future amid bankruptcy proceedings.
  • The company's exit makes room for competitors to claim customers.
  • Babies R Us is the third most popular destination for baby registries after Amazon and Target, according to a WeeSpring survey.
Toys R Us and Babies R Us stores
Amer Ghazzal | Barcroft Images | Getty Images

The closure of Toys R Us and Babies R Us has sent customers of the stores' baby gift registries into a panic.

Some customers have reported unfulfilled orders, while others have been forced to transfer entire registries to competing services. Those rivals have taken notice.

Natalie Gordon, founder of registry website Babylist, estimates that around 100,000 active Babies R Us registries may be affected. Babylist, which allows users to add gifts from any online retailer, published a guide to help customers transfer their wish lists.

"We have many registrants with Babies R Us products," Gordon told CNBC. The company plans to help customers by actively suggesting alternate retailers for products sold by Babies R Us.

Bed Bath & Beyond's Buybuy Baby published a tagline on its website in response to the Babies R Us closure: "We're here to stay. Shop with confidence!" The company is helping parents to recreate their Babies R Us registries.

"We understand these parents already spent time creating their registries, so we set up these easy steps to make the transition as seamless as possible," said Meka Millstone-Shroff, President of Buybuy BABY.

Babies R Us registries remain operational for now, and the company declined to say how long they will be supported.

The store was the third most popular destination for baby registries after Amazon and Target, according to a survey by product review website WeeSpring. Most parents list with two or more registries, the survey found.

A major draw of Babies R Us is its Endless Earnings program, which offers up to 10 percent back on baby registry purchases. But such rewards begin 12 weeks after the child's due date, meaning that many parents may not receive rewards earned in recent months.

Customers holding gift cards will have until April 20 to spend them, according to the company.

Online sales of baby products is a $7.5 billion industry, according to IBISWorld. Amazon leads the market with 27.5 percent share, followed by Target at 5.8 percent.

Baby registries present a strategically important asset to capture this spending. "Companies that are able to provide a seamless registry experience either online or through a mobile app are likely to attract more customers," said Claire O'Connor, an analyst at IBISWorld.

Babylist estimates that registry sales will total around $2 billion in 2018.

The Toys R Us liquidation has already hit snags. Final sales were scheduled to begin Thursday. But upon arrival, customers found signs posted on storefronts that the liquidation sales had been delayed, Business Insider reported. The sales are now expected to begin Friday.

In another surprise turn, Toy co. CEO Isaac Larian launched a last-ditch effort to save Toys R Us, promising $200 million from investors and stating a goal of crowdfunding the rest.