Another giant of retail has announced it is shutting its doors.
Toy store chain Toys R Us is planning to sell or close all 800 of its U.S. stores, affecting as many as 33,000 jobs as the company winds down its operations after six decades, according to a source familiar with the matter.
A group of toy makers led by MGA Entertainment, the giant behind brands such as L.O.L. Surprise!, Little Tikes and Bratz on Wednesday submitted a bid to buy Toys R Us’s Canadian arm, which includes 82 stores, according to Isaac Larian, MGA’s chief executive. He added that he is also looking into buying as many as 400 U.S. stores, which he would seek to operate under the Toys R Us name.
“There is no toy business without Toys R Us,” Larian said, noting that he sold his first product to the chain in 1979. “It’s a big deal and I’m going to try to salvage as much of it as possible.”
According to its September bankruptcy filing, Toys R Us owes MGA Entertainment $21.3 million.
Despite turnaround efforts at Toys R Us, which included adding more hands-on “play labs,” retail experts say the 60-year-old company has been unable to get customers back into its stores. It doesn’t offer the low prices or convenience of some of its larger competitors, nor the fun-filled experience that many smaller outfits do, some analysts have said.
Toys R Us, based in Wayne, N.J., has been struggling for years to pay down billions of dollars in debt as competitors like Amazon, Walmart and Target win over an increasingly larger piece of the toy market. Its bankruptcy filing last year cited $7.9 billion in debt against $6.6 billion in assets. The company said it has more than 100,000 creditors, the largest of which are Bank of New York (owed $208 million), Mattel ($136 million) and Hasbro ($59 million).(Jeffrey P. Bezos, the founder and chief executive of Amazon, owns The Washington Post.)
For many of us, Toys R Us was a mainstay. It was a treat to go there and just be surrounded with TOYS, especially in the era of pushing nostalgia of the late Gen X and Millenials. I remember playing the first 30 seconds of Metroid there (barely enough to get the morph ball), of wandering around in awe looking at all the bikes, and generally just having the time of my life.
Lately, however, Toys R Us has fallen on hard times. Undoubtedly hit by the emergence of online stores, TRU's problems mostly revolved around debt. They would buy large swaths of product, and then not sell them. Anecdotally, I found this was because TRU usually had higher prices than their competitors (there is a well known "tax" on TRU exclusives), and further they just didn't rotate stock much. So every time you went in, you saw the same things.
That said, TRU has been a stomping ground of mine for nearly 15 years. As a toy collector, I would stop in regularly (at least once a week for the last few years) and see if anything interesting was released. I loved seeing the happiness of kids running around. And sadly.. I'm likely never going to see that again, unless MGA succeeds.
In the Lego thread, we were talking about how this has a lot to do with Bain Capital, who floated a loan to the company and then wouldn't help them pay down that loan. I don't see that referenced in the WaPo article, so I'll just call that unverified for now.
But needless to say, this is going to hurt the country.. perhaps in more ways than one.
THIS THREAD IS ABOUT:
The closure of Toys R Us US, UK, and the buyout of TRU Canada\
The business practices of TRU (including working conditions, treating customers, etc.)
How toy stores can survive nowadays
How toy business works (man, remember the controversies over Breaking Bad action figures in TRU?)
The future of TRU
THIS THREAD MIGHT BE ABOUT
Changing demographics in kids - notably, TRU still had extremely rigid gender roles defined, though I suspect most of that is on the toy manufacturers. But.. very classical.
THIS THREAD IS NOT ABOUT
Not letting a kid be a kid.