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Toys R Us To Close All 800 of Its US Stores (washingtonpost.com)
Toy store chain Toys R Us is reportedly planning to sell or close all 800 of its U.S. stores (Warning: source may be paywalled; alternative source), affecting as many as 33,000 jobs as the company winds down its operations after six decades. The Washington Post reports: The news comes six months after the retailer filed for bankruptcy. The company has struggled to pay down nearly $8 billion in debt -- much of it dating back to a 2005 leveraged buyout -- and has had trouble finding a buyer. There were reports earlier this week that Toys R Us had stopped paying its suppliers, which include the country's largest toy makers. On Wednesday, the company announced it would close all 100 of its U.K. stores. In the United States, the company told employees closures would likely occur over time, and not all at once, according to the source, who spoke on the condition of anonymity because they were not authorized to discuss internal deliberations.
With a new twist.
I feel I've been reading for years that they were closing, going bankrupt, etc.
... go today (now).
This is not surprising (Internet, etc. etc.). However, few things can compete with the sheer joy I had as a child when given the rare opportunity to roam the aisles of a Toys R' Us to discover, touch, test, and play with the toys. The "aisles" of Amazon are a poor substitute for a child.
All the Toys R Us kids have grown up.
Financial instruments of mass destruction.
Think about all the common workers who broke their backs making the stores into a great place to shop.
And how quickly the raiders can come in to destroy all that value.
They died due to greed from owners and investors:
"KKR, Bain and Vornado purchased Toys "R" Us in 2005 in a $6.6 billion leveraged buyout, but more than $5.3 billion of the purchase price was paid using debt."
8 billions of debt, at least 5.3 purely due to the buyout. Maybe their future wouldn't be so good with Internet, etc. but it's not what killed them today, the leveraged buyout did.
This is simply another company that failed to hold on through the economic recovery of the last decade. The recovery we heard so much about over the last few years. That and a changing market competing with eSales and shifting parental demographic and they couldn't compete. Musk could buy them and offer Tesla service in every major city in the USA. Failing that Bezos could buy them and launch his drones from every city in the USA. :P
Outside of tablets, fidget spinners and slime most kids aren't playing with toys any more.
Their toys are mindless un-fun corporate shit.
My kids are always bored there. We've found much more fun toys at Target, not to mention Amazon.com, whatever you think of both companies. We bought a potato-driven clock and a home-terrarium kit on Amazon.com for under $10 each that the kids enjoyed. They get TinkerCrate which they also enjoy, and I consider it expensive at $29 a crate. But walk into a Toys'R'Us and all you can get is 8" plastic action figures in garish colors for $49.99 each.
Toys'R'Us should be called AMillionFlashyBrandedOverpricedActionFigures'R'Us.
At least near us, the two stores had no science kits, no craft stuff, no learning toys to speak of, no building toys to speak of, no creative toys of any kind. The best section were bikes and skateboards in the back. The rest is literally wall-to-wall action figures from cartoons that my kids have never heard of because cartoons are so twenty years ago and we don't have TV. They are much more interested in apps than in TV.
Toys'R'Us is selling toys from decades ago—thousands of them, all the same, and for 4x what they ought to cost.
STOP . AMERICA . NOW
I grew up in rural northern Wisconsin on a farm 10 miles from a town with 800 people. It had a Sears and Roebuck store. Well no goods just a catalog order center, along with 15+ actual stores on main street. Once a year the new Sears and Roebuck catalog came out and in the fall came the Sears and Roebuck Christmas catalog and that was the object of childhood dreams.
;) Some brick and mortar will survive in urban areas. But the real retail sales numbers will be online sales. Especially in rural America, online sales (Amazon) is the new Sears. Sears could have done it, but they did not see that vision of an online future. Like most entrenched old players. They got to comfortable. An upstart had to come in with a new vision.
;)
Sears another old company that is dying
Just my 2 cents
Sad, as with all institutions of our lives, but at the same time, I'm surprised they lasted as long as they did.
I can't think of anything you can find at a Toys R Us that you can't find at a Walmart, say. Amazon owns online toy sales. And even the nature of toys has shifted a lot.
I remember walking through those isles as a child, in awe. Those tall glass walls on either side full of NES, Genesis, and SNES games. Domino rallies, Super Soakers, Lego sets.... Amazing memories. I hope children will still get to experience the same thing elsewhere.
Must've been ten years ago because my daughter was four, a couple weeks after Christmas they wouldn't let her exchange a duplicate toy with a copy of the receipt because her grandmother (300 miles away) was the purchaser.
Everybody involved was pissed or upset except for the smarmy clerk who was delighted to disappoint by enforcing corporate policy. I hope she got a promotion and stayed with the company.
Since then she's had an Amazon wishlist and sometimes gets Walmart gift cards. Because both of them (especially Amazon) do a petty good job with customer service.
Toys R Us will say that Walmart and Amazon killed them - but in reality they self-destructed.
My God, it's Full of Source!
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Those stores are just a painful reminder about how my parents wouldn't take me there and buy me toys. I hate that place.
Until Icahn's leveraged buyout and liquidation of them.
https://www.youtube.com/watch?...
One, of course, is "the internet" though - IMO - a truly innovative company could easily adapt to that but when you combine the corporate piracy of private equity loading these companies with debt (which, Oh! BTW! Precludes making the necessary investments to make "One" no just less a threat but a real opportunity) in order to make them more attractive for selling off, then you have this kind of mess. Marx called it: it's the Capitalists who will kill capitalism, sadly.
Yet another company that got Bained. Kay-Bee had the same thing done to them. Can we just ban leveraged buyouts already?
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A new chain of empty store fronts brought to you by Toys Rn't Us. Right next to your local Radio Shack.
My mom used to work at Children's Palace (https://en.wikipedia.org/wiki/Child_World), which was a competing toy store in the 80's. Toy R Us would build their stores right next to them to try to put them out of business. When the weekly flyers came out for sales on things like baby food and diapers, Toys R Us would send their employees over to Children's Palace to buy up all the sale items in the flyer so that they were out of stock, causing angry customers - many of whom were low income. Toys R Us minions would sometimes just throw away the merchandise in the trash outside the store after their raids. My mom had a lot of stories about their guerrilla retail tactics. Toys R Us eventually won out and Children's Palace went out of business, but my parents never let us go there. Bankruptcy couldn't have happened to a more deserving company, albeit 30 years too late.
The *majority* of America's children today qualify for free or reduced lunch. https://nces.ed.gov/programs/d... That was 30% and even a little below in Toys'R'Us '85-'95 heyday. (And the qualification hasn't changed... 185% of the poverty line). And even a little above average now is pretty poor (family of 4 making a whopping $39,000 gross... that kid is too rich for reduced lunch. That's above average now!). Healthily middle class families with kids are simply getting rarer and rarer.
I guess I'm going to have to let my kids roam the aisles of my local Amazon warehouse. Just stay out of the way of the robots.
As a kid I wanted to work there when I grew up. Its a sad day. So many toy stores have closed.
if children had limited TV and no Internet, then the brick and mortar store would be a surprise to visit and your choices would be what you saw..
the touch and feel and buy experience is gone for some toys, maybe not so for bicycles..
The private equity consortium that bought Toys R Us in 2007 and loaded it with 7.5 large in debt. When I think of it, I can only think of the Dr. Cox quote from Scrubs: "Do you know what they are mostly? Bastards. Bastard coated bastards with bastard filling."
And they laughed all the way to the bank.
If this model works so great, why don't the pirates buy Google, too? Just imagine the size of a Google squeeze.
Obviously, the underlying reason that TrU was targetting in the first place is because it was a vulnerable business, clearly facing into a stiff, online-retail head wind, and the bottom-feeding pirates could clamber aboard at an affordable hoard of highly leveraged ducats.
Why #3: What prevented TrU from defending itself with the appropriate iocane poison pill?
I don't happen to know enough about this to answer that question, but the reason can't be that they had never heard of the Princess Bride.
How come they aren't closing all their Canada locations? I live right beside one in Canada and the parking lot is always packed but you'd think they would have the same general problems.
they only sell console games. They should have bought GOG or valve (or make their own app store) and sell PC games. That would offset their physical toys nicely.
he took that Ayn Rand Atlas Shrugged nonsense to heart and pitted his staff against each other in competition. The idea was the weak would perish and the strong thrive. In practice they stabbed each other in the back since it didn't matter how bad your team did so long as the other team did worse.
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What remains of the chain will be sold to a group of African-American investors who plan to rename it We B Toys N Shit.
How ya like dat?
Where are the Jarts?
While the Toy-r-us closes all its US stores, its stores in Asia are not affected
In other words, Toy-R-Us is moving its operation to Asia
Growing up in the Philly area, we had Kiddie City, which was much like Toys R Us, and it was okay to go there sometimes, but not really great. By the time Toys R Us showed up, I was old enough not to care so much, and I agree with the comment here that it "was like a KMart from 20 years ago, poor, uncovered fluorescent lighting, drab interior, know nothing staff". For me, there were two toy shopping experiences that trumped everything.
One, looking through the Sears catalog. Sears was the wizard of merchandising, they knew what people liked or wanted, and what to stock and how to show it off in their catalog. Even if I didn't buy anything from it (well, cajoled my parents to buying something for me), it let me know what I wanted to buy if I walked into Kiddie City. It was the reverse of book browsing in modern day Walden Books then buying on line at Amazon. There was something beguiling about "shopping" at home that way. It would be nice if Amazon and other modern online retailers created more of a catalog or browsing experience like those old mail order catalogs used to be. It would be a nice mix of old and new paradigms, taking the best of what worked from each.
Two, the corner drug store. When mom and dad needed a weekend alone, we got to stay with the grandparents, who were ever over-indulgent. One of the biggest treats was walking a block up to the corner drug store (independent, pharmacist owned, quaint, and packed solid with merchandise along narrow isles in a small space) to get goodies. One of those narrow racks had the kid stuff. There might not have been much by the standards of a Toys R Us, but I never failed to find a toy plane to fly or a plastic model to build or some cheap board game that was a good excuse to have fun with my grandparents or cousins. I'll take that experience over Kiddie City and Toys R Us any day of the year.
So, too late to exchange those old Geoffrey Dollars for Bitcoin?
Their computer systems were long in the tooth by then. They didn't have per-store printing of the in-store prices, meaning that our ORIGINAL location, not being one of the later standardized floorplans, didn't have defaults that matched the shelves pricing placards, resulting in 3+ hours every other day replacing updated/sales prices on every changed item in the store. They wasted a lot of man hours doing this, in addition to moving limited inventory merchandise to the clearance racks/bins and replacing the empty bins/racks with the new items.
It was a huge clusterfuck, before getting into what departments did what jobs, giving bonuses to cashiering/sales staff while giving beratement to backend staff (ie inventory, marketing, etc, important for the cashiers to get good reviews, but not getting any of 'most sales/best customer service' acknowledgement that cashier/sales staff got.)
I wasn't there for long, and visiting a few times in the next 2-3 years afterwards, only a few oldtimers were still working there. Sears was going downhill before the K-mart buying and from everything I was told only got worse after it. The irony of the matter was: K-mart had gone through a bankruptcy that let it hold onto all its cash, while Sears was making a minor profit, had tons of assets and no debt, and somehow managed to get bought out by a company only a few months/years out of bankruptcy who was somehow flush with cash... Someone explain that to me, because it seems to explain how this Toys R Us thing played out.
I remember walking the aisle of guns, plastic, cap-guns, some event metal. I remember the aisle of transformers and all the other cool robots. I remember the lego aisle, GI Joe and action figure aisle...where have all the good toys gone?
Kids these days...don't even get a chance to play cowboys and Indians because it's not PC (heck even the stupid spell-check in /. capitalizes "indians"). Forget about guns or anything so non-progressive. I'm not saying that guns, playing cowboys and "Indians", or robots are the way to save Toys R Us, but sterilizing kids imagination and ability to push the edge seems to be a little backwards I think. Ever try to keep a compression spring compressed with your fingers...at some point the spring wins and that's what we're seeing today. Later Jeffrey...maybe the zoo will take you.
Hindsight is 20/20, but it is amazing that you would have to point out to a highly paid "business" executive that maybe there is a better use for billions of dollars than stock buybacks. If they had invested that billion in 1998 in ways to better compete in the future, who knows.
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Except over here the mainstream media rhetoric is to blame "brexit".
I've lived in the UK and US, Toys-R-Us has been pure garbage for many years both sides of the pond. They have the same grotty stores, same lack of staff, and many of those they have are worse than Walmart checkout workers. How the company lasted so long would be a worthy discussion.
Debt riddled husk leftover from a leveraged buyout plundering by private equity.
I always considered Toys R Us to be the Radio Shack of toy stores: piled high with cheap garbage and staffed with indifferent drones.
Toys R Us jumped the shark back in the mid-90s when they started reducing inventory and changing their store layouts to be more like a boutique of toys rather than a warehouse of toys. Followed by dropping long-time employees in favor of illegal (low-wage) immigrants and reducing the number of cashiers. For a brief period of time in the early to mid 2000's they attempted to take online seriously with decent deals and fast shipping but even that went downhill fast. It's shocking they never bothered to invest more heavily into online sales. There is no online store offering serious discounts on toys. Back in the 1980's it used to be possible to walk into a Toys R Us and buy toys no more than a year old that were on sale for 30%-50% off ("look for the orange sticker") now you will be paying full price or more than full price anywhere you go.
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I seem to remember them "shuttering" all their stores back in the 80's. In fact as a kid that's when I was finally able to afford the TI/99-4A Extended BASIC they had in stock (was normally like $90 but "closing" clearance for $30).
Bain keeps popping up today, like a blight let's see Toy's R US and now I Heart Radio and what do they have in common? LBOs lead by Bain.
These private equity firms create nothing except debt and huge profits for themselves and their customers.
Harrison's Postulate - "For every action there is an equal and opposite criticism"
How much do you want to bet that the so-called Masters Of The Universe got paid, and paid handsomely, shortly after the deal closed? Those useless clothes racks don't have to account for the results of their work.
To other commenters, suggesting that the Toys stores are dingy or poorly stocked. I cannot prove this, but one reason for poor store outfitting would be... lack of money due to high corporate debt levels.
When you loot the till there are consequences.
What a very big CEO called it. In such a booming economy. Paper Tiger.
My dad bought me my first computer from Toys R Us... It was a Commodore VIC 20. It came with a book about programming BASIC iirc, and that was my first exposure to programming. Now I sit here at my desk browsing slashdot and wasting time while my code is compiling.
and they walk around for a few minutes with a distant look on their faces and then ask to leave, it is a shitty toy store.
I have no idea if they had a science kit in the back somewhere, or the microscope we got at Target on a top shelf somewhere (no doubt it would have cost at least double what we paid at Target) but the fact is, I have two young kids and on the couple of occasions we've gone there (once to spend a bundle of grandparent-given birthday money), both kids were, like *so meh*.
If you're a toy store and kids don't want to be there, you have a serious problem.
There are a couple of local independent toy stores, on the other hand, that they absolutely LOVE. You have to fight to get them to leave. We only shop these maybe a couple of times a year the prices are still high to me for what you get compared to online, BUT they have a very different selection of toys from brands that I don't remember on Saturday morning cartoons, not to mention very engaging displays, both of which the kids are fascinated by—it all generates that same "wow!" look that tells you the kids are fascinated. And I'd say that 35% of what the local independents stock isn't easily available online. From said local toy stores in the last year we bough a big dragon kite, a set of fairly difficult 3-D cast metal puzzles, a large bow and arrow set with foam-tipped arrows that actually has very real-life action and shoots arrows about 100 yards, a strategy game called Rubber Road that they really like, a Bloxels set, and a cool card game called Evolution that the kids are willing to play for hours and that actually does a reasonable job of illustrating the concept of natural selection in a very basic, reductive way (it's supposed to be for 12 and older, and it cost $40 ugh, but they love it anyway even though they're both under 10).
We never sighted stuff even remotely like this at our local Toys'R'Us stores. Instead, the board game aisle features about 50 variations on Monoply which of course we already have because there are eleventy billion sets already being passed down in families out there, a few ill-conceived highly branded board games that appear to be more about representing the characters to keep the kids interested in the TV property and drive ad revenue, plus a bunch of "gross out" games—plastic toilets that spray water in your face, random catapults that fling slime at the players (for which they're happy to sell extra slime on the side), etc. No strategy. Barely any rules. And the "toy" aisles are labeled with big signs: Disney. Marvel. Hasbro. Mattel. Crayola. etc. It's all organized by what appear to be brand-sponsorships, yet each aisle seems to have essentially the same stuff, just with different faces and costumes and paint jobs and packaging slapped on them. Bubble-packs of action figures hung on hooks. Below them, their "vehicles," "weapons," or "transport animals" in boxes. Supporting or minor characters toward either end of the aisle, major "characters" from the film/cartoon/etc. in the middle. All overcolored and overpriced and boring as sin.
To make matters worse, it's all $30-$50 for these cheap little hunks of plastic that really don't stimulate the imagination at all, or up to $hundreds for variations on the concept of "play house" (or castle or fortress or whatever) for said hunks of plastic. I mean, this stuff is just random brightly colored shit without much replay value or learning value, is not inspiring in the least, and would cost $3 at a Chinese import bric-a-brac store if not for the brand stamped on it and the overdone bubble packaging and loud labels IN ALL CAPS WITH EXCLAMATION MARKS! The Crayola aisle at least has creativity stuff, but the local Wal-Mart stocks the same crayon box sizes for $0.99 (for sixteen crayons) to $5.99 (for sixty-four) vs. starting at $3.49 for sixteen crayons. Who is going to pay $3.49 for a box of sixteen crayons? Or $7.99 for a 100-sheet sketch pad of not particularly high quality paper? WTF?! Particularly when the exact same items, t
STOP . AMERICA . NOW
How many places can you not carry bags in besides a coffee shop or other place where everything valuable is behind the counter?
It's obvious they had a specific problem with shoplifters at the specific time you went there.
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"...Toys R Us would have closed 13 years ago."
Really? They would have closed 13 years ago, without the corporate raiders?
Or maybe, and more likely, Toys R Us would have kept operating, profitably, without a buyer to loot the place? Or maybe, Toys R Us would have found a more compatible buyer at a cheaper price, which is what happens when you are determined to sell but cannot get the price you want?
Your views are nihilistic. "Toys R Us was doomed! Either they die 13 years ago or they die today, so it makes no difference what happened. Thus we are relieved of any responsibility of examining the actions of the suits."
Being burdened with crushing debt as a result of an LBO has consequences. Maybe Toys R Us would have used a strong balance sheet to upgrade their stores. Maybe they would have purchased other retailers. Maybe they would have successfully transitioned to an online world, with whatever fleet of bricks and mortar outlets made sense for them. And whether they would have or not at least they would have had a chance.
Debt limits your options. High debt kills your options. If you cannot see this then you are no kind of businessman, no financier, and no investor. You are an apologist for corporate raiding and pillaging.