But he said he did not believe there was any "ill intent".
"It was just inappropriately placed," Mr Helon told Sunshine Coast Daily.
The dolls have been regularly spotted in gift shops across country Australia over the past year.
"Toowoomba is the most racist city in Australia," author and activist Stephen Hagan told the Sunshine Coast Daily.
"Words can't describe this behaviour in the 21st century. I can understand it in the 1960s but to do it today is inexcusable."
The store's Managing Partner Alwyn Baumann offered an "unreserved apology" in a statement, saying the store had made a "regrettable error" with the display dolls, which they will "not stock in future".