Amazon Will Publish Toy Catalog This Holiday To Fill Toys R Us Void, Says Report (bloomberg.com)

An anonymous reader quotes a report from Bloomberg: In a drive to win the business up for grabs after the demise of Toys "R" Us, the online giant is going conventional with plans to publish a holiday toy catalog. The printed guide will be mailed to millions of U.S. households and handed out at Whole Foods Market locations, the grocery chain Amazon bought last year. The move is part of Amazon's push to incorporate traditional retailers' tools into its business model. It even looked at acquiring some Toys "R" Us locations earlier this year. That came after its $13.7 billion purchase of Whole Foods made a big splash as it pushed into brick-and-mortar retailing.

For all its woes, Toys "R" Us, which is closing all U.S. stores after failing to emerge from bankruptcy, was still a force during Christmas. Its "Big Book" toy catalog was a staple at 100 pages or so, with toymakers often starting their holiday advertising to coordinate with its arrival in late October. Even with the emergence of screen time and smartphones, kids still enjoy searching through toy catalogs -- which Walmart Inc. and Target Corp. also produce -- to make their wishlists.

Comments

Next Up: Victoria's Secret!

[cervesaebraciator]

News Flash!: The internet will now respond to the lack of a Victoria's Secret Catalog with endless amounts of... oh, wait. That's exactly what killed the Victoria's Secret catalog.

Party City is planning to open a toy city

[rsilvergun]

I think this pretty clearly shows plenty of Demand for a toy store. Point being Toys R Us didn't die, it was murdered.

Re:Party City is planning to open a toy city

[ShanghaiBill]

I think this pretty clearly shows plenty of Demand for a toy store.

No, it shows demand for a toy catalog. The kids would receive the Toys R Us catalog, lay down in front of the fireplace, go through the catalog page by page, and mark the toys they wanted. Then the parents would order them from Amazon.com.

Re:Party City is planning to open a toy city

[tlhIngan]

> Point being Toys R Us didn't die, it was murdered.

No, it died. The writing was on the wall for a long time.

The leveraged buyout was just a way to accelerate the inevitable. When you have access to massive debt creation tools, you can play games like that. What they did is create a bunch of money in order to jump the line of debtors and suck the marrow from the bones of the dying beast before it hit the ground. The real losers are the debtors who were not in on the game.

When it became obvious that the outlook was bleak, suppliers should have demanded better terms or even Net0 payments. ToysRUs defacto creditworthiness had defacto dropped to zero, and some sharks smelled the blood in the water first.

In a post-dollar economy, this might not be possible

No, it was murdered. The leveraged buyout basically killed it.

Toys R Us was actually a decently run company. They held their own against against big-box retailers like Target, Walmart, etc, they also had a decent webstore (it was one of the first online stores, at that) to compete against the Amazons of the world too.

The problem with the leveraged buyout is none of that matters - the leveraged buyout basically hung a huge anchor around its neck, such that instead of being able to invest in the business to compete (which it did so handily), it had to keep paying out tons of money in interest to service the debt. This works great, but a little hiccup in cash flow means you're circling the drain. Just a slightly slow quarter and you're screwed. And that's what happened.

That's why we call it murdered - because without the leveraged buyout, it was holding its own despite the onslaught of Walmart, Target, Amazon and others.

Company Man explains it much more clearly.
https://www.youtube.com/watch?...

Yes, Amazon and Target and Walmart and others had an effect, But they had an effect on every other store as well.

Re:Party City is planning to open a toy city

[The Cynical Critic]

If you look at Toys R' Us' actual per-store sales figures over the last decade or so you can clearly see that the enormous amount of debt and related costs that ended up on their balance sheet when Bain Capital & Co went trough with the leveraged buyout* was absolutely the final nail in the coffin, but it wasn't the root cause of their demise. That was the decline of physical retail in general.

Sure, they'd probably still be around today and be able to limp on for some years, but they'd be in a very similar situation to Sears and many other dying physical retail giants. The unsustainable amount of debt taken on under the incorrect assumption that they were going to grow enough in online retail to offset the shrinking physical retail market merely sped up the inevitable. The significant interest payments that had to contend with ate up any profits and prevented them from making necessary investments, leading to an increased sales decline and finally when they realized that they weren't going to be able to pay an upcoming set of loan repayments (all stemming from the Bain & Co buyout) they really didn't have a choice but to throw up their hands and declare bankruptcy.

*Bain & Co took over the company in a way where the company basically bought itself off the stock market and took the debt from buying all of it's shares on it's own balance sheet, thus ending up with massive debts.

You do know where Toys R Us' debt came from

[rsilvergun]

right? They got Bain'd. A company bought them, loaded them with debt, paid themselves bonuses with that debt and then the company collapsed under the weight of that debt. Toy stores need to be fun places to go. When my kid was little she desperately wanted a wood toy train set because she played with it at Toys R Us. We eventually bought the $150 model (the one set up there was close to $400 IIRC). The last time I went to a Toys R Us (looking at Star Wars figures after the first of the new Star Wars came out) there was nothing like that. Nothing cool for the kids to play with. Hell, they didn't even have video game kiosks set up. I remember being a kid and buying a Sega Master System because I played Maze Hunter 3D on a kiosk and later a Sega Genesis because I played Sonic the Hedgehog.

Toys R Us had none of that because they had no money. They didn't have the resources to build a fun place to play so parents stopped going. At the end it was just a warehouse. That's not how you compete with the internet. You compete by making spaces people _want_ to go to. But that costs money. Money they were spending on interest payments to loans that were paid to CEOs as bonuses.

Re:You do know where Toys R Us' debt came from

[Actually, I do RTFA]

The "last time you went the the Toys R Us", they were in year 7-10 of being Bain'd. That's why they had no money to set up displays. Because Bain fucked them over.

I Wish For The Sears Christmas Wish Book

[mallyn]

Folks:

Many of you are too young for this and you don't know what you are missing . . .

Once upon a time a long time ago (1960's ish) Sears would publish the 'Christmas Year Book' their Christmastime catalog.

That was one druool maker! I would spend hours upon hours drooling all over that Christmas Wish Book! Wishing I could have all those wonderful toys that my family could not afford!

I wish that can return!!!

Re:I Wish For The Sears Christmas Wish Book

[Miles_O'Toole]

And when you got a little older, you would spend hours and hours drooling over the models in the Ladies' Underwear section.