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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.
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.
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.
In this case it is deliberate bankruptcy. The 80s corporate raiders never retired, they became private equity firms. They buy companies and let them fail under the weight of debt servicing (the debt being serviced, for good measure, was incurred in order to buy the company). The only people who lose are the complete idiots who finance these takeovers -- oh, and everyone who works at the company in question.
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.
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!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
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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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.
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.
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.
From earlier in the year: Why Toys “R” Us Is Closing One-Fifth of Its Stores
Reported earlier last year: Bain, KKR, Vornado Suffer Wipeout in Toys ‘R’ Us Bankruptcy
Bain and Co financed most of the purchase cost of Toys R Us with Debt, have made half a billion dollars in fees since then, and will suffer nothing from the closure of Toys R Us, unlike everyone that actually works for Toys R Us.
That doesn't make sense. Private equity companies buy struggling companies at a multiple of what they are worth, in hopes of selling it for more later. It was purchased in 2005. I am sure the equity company who owns it isn't happy that they are going bankrupt.
No they don't. They buy them to suck them dry.
By the time these companies go bankrupt the private equity firm has usually gotten multiples of their actual investment back out.
It makes sense only because of such low interest rates that all kinds of unwise proposals can look pretty good on a powerpoint presentation under those conditions. When safe bonds are paying 1%, offering 2% is an easy way to find suckers.
Furthermore, the equity company itself might be doing just fine. I do not know the details about ToysRUs, but in the case of Sears, the owners of the equity company also owned a sister commercial real estate company, that "helped" Sears out of a cash crunch situation brought on by bad management. That sister company bought about $8-$10 billion of real estate from Sears for $3 billion cash, and rented the property back to Sears. So the equity company itself may looked trashed on paper, while the owners of the equity company make $5 billion elsewhere.