11 ms·
Toys R Us to close all 800 of its U.S. stores
- deleted 9y ago[deleted]
- Scoundreller 9y ago> The company has struggled to pay down nearly $8 billion in debt — much of it dating to a 2005 leveraged buyout Good business, bad organization.
- _rpd 9y agoYeah, look for a brand reboot after the bankruptcy.
- BoorishBears 9y agoSomeone was trying to reboot Circut City in a similar fashion They reached out to my former company (a retail marketing firm) for some work a little over a year ago, and Googling the name shows it’s probably not going so well.
- cpkpad 9y agoPeople hate Circuit City. Not quite clear why you'd want to start with a hated brandname. There was the whole restocking fee thing, the DMCA thing, and a whole bunch of others. I don't quite recall them all. Plus, it was always overpriced. No brand is better than bad brand.
- geerlingguy 9y agoAnd DivX! https://en.m.wikipedia.org/wiki/DIVX https://en.m.wikipedia.org/wiki/DIVX
- deleted 9y ago[deleted]
- farnsworthy 9y agohttps://www.youtube.com/watch?v=e_sWmWM7-fs https://www.youtube.com/watch?v=e_sWmWM7-fs Experts (?) with their "sense of excitement" and such, but the parents shopping for this year's Xmas sensation consumer good will be looking at price and availability (with "Getting the hell out of there" likely somewhere in the mix), hence Walmart then, and Amazon now.
- originalsimba 9y agoThis is the first time I feel comfortable saying "But think of the children". How can this country be creating a world where children grow up without toy stores? When I was a kid Toys 'R' Us was a wonderland that excited my imagination around every corner. Money isn't everything. Money doesn't even really matter at all. A world without toy stores matters. i'm a toys 'r' us kid
- farnsworthy 9y agoSad Original Simba. :(
- aembleton 9y agoI don't know the US, but here in the UK the rival toy stores - Smyths and The Entertainer are more entertaining for children and The Entertainer is predominantly based in town centres. Toys R Us relies upon parents driving to an out of town shopping centre. There are also independents that do a better job of presentation than Toys R Us. They're more expensive but so are Toys R Us compared to Amazon.
- lnsru 9y agoThe store in Germany, Reutlingen to be exact, wasn’t appealing. The toys were ok, but the location wasn’t the one to go with kids on the weekend. Worn out buildings in industrial area.
- yitchelle 9y agoThe toy shop situation in Germany is desperate. The ToysRUs near Cologne looks like they are from the 60s and is hardly distinguishable from local Obi or Toom hardware store. It is not an attractive place for the kids to visit.
- tonyedgecombe 9y agoIn the UK Toys R Us was really grim and dirty, the staff were distracted, the whole place felt like a prison you wanted to escape from. I'm not at all surprised by its demise.
- chris_wot 9y agoHang on, a leveraged buy-out caused this? So basically, someone can borrow more money than the business can ever afford to pay back, and then that business can be taken over and go bankrupt, even though it financially has no issues?
- number6 9y agoMore like you borrow money to buy a business and use their money (and projected income) to pay back the debt you made to buy the businsess.
- vkou 9y agoIt's kind of like taking out a mortgage to buy stocks, or, these days, bitcoin, and then expect to pay it off with dividends and appreciation.
- astrange 9y agoExcept that would be your problem to pay off, but here they get out of it and the seller(!) ends up responsible.
- pjc50 9y agoSimilar to Maplin: http://www.coppolacomment.com/2018/03/the-sad-story-of-maplin-electronics.html http://www.coppolacomment.com/2018/03/the-sad-story-of-mapli... Note the use of an elaborate corporate structure which involves a company paying its parent company 16.5% (!) on debt.
- ascagnel_ 9y agoWorth noting here: TRU was paying about that much (~$400MM/yr on $5B) on its debt as well.
- Shivetya 9y agoSo in some ways this is similar to Blockbuster. Ignoring much of the debt brought on by that buyout it appears they simply could not adapt the shopping preferences of their market. Yes the debt was a dark cloud hanging over them but if what the article implies is true it was only a matter of time before this result would have occurred; it might have been a more stable transition but it would have come. I also believe that not only did they succumb to online retailers but their price point was easily undercut by the dollar style stores in some markets and besides pricing the retail locations were not always ideal
- cpkpad 9y ago.... Or they could have made play areas kids wanted to go to (when I was a child, going to Toys-r-Us was the ultimate thing), and sold toys people wanted (instead of branded sensory-overload crap). They failed to adapt to consumers of 2018.
- machinehermit 9y agoI am just not sure that would save this business model though. IMO it is very much like Guitar Center for music. There is no way Guitar Center is around in 10 years and there is nothing that can be done on their part. The whole concept that the business is based on is outdated.
- CptFribble 9y agoI'm curious what it is about Guitar Center that you're saying is outdated: I would think buying an instrument demands at least some hands-on experience to confirm your choice, but not many parents are concerned with giving their kids a test drive of new toys before purchase (and indeed can't, due to packaging).
- dexterdog 9y agoSensory-overload crap is not what the consumers of 2018 go for?
- andyjohnson0 9y agoAlso shutting all of its 100 shops in the UK. https://www.theguardian.com/business/2018/mar/14/toys-r-us-to-shut-all-uk-stores-resulting-in-3000-job-losses https://www.theguardian.com/business/2018/mar/14/toys-r-us-t...
- DennisP 9y agoPerhaps all is not lost: > A group of toymakers led by Isaac Larian...submitted a bid to buy Toys R Us’s Canadian arm, which includes 82 stores, according to Larian. 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.
- wjnc 9y agoBy far the best toy store in our hometown is a 30-yr old store that sells mainly wooden toys, board games, kites and nice dolls. They've survived and even improved in recent years, while the big toy stores merge and get less numerous. That's awesome and I happily applaud being part of that as a customer. Every play toy should last multiple children as a rule. We don't take that to the extreme as parents, but the basic rule is sound. Even children like it that their cousins play with the same toys they've played with when younger. Buy good stuff. Share. Bye bye Toys R Us.
- slx26 9y agoThis. I feel a big problem the industry has is that they started to care more about ads and just grabbing attention than actually caring about product quality. Sure, you will sell more and toys will be frequently replaced, but in the end I do not believe that's an stable plan. I mean, economically understandable, but I hope we get our focus back on 'good toys' soon. Actual engagement over stimulus overload. Toys are so important for kids, and I think parents are already realizing again.
- scarface74 9y agoThis. I feel a big problem the industry has is that they started to care more about ads and just grabbing attention than act In the 80s, weekdays were full of 30 minute toy commercials masquerading as cartoons - Superfriends, GI Joe, Transformers, etc. The 80s Transformers movie killed off all of their characters and introduced new ones to sell more toys.
- dspillett 9y ago> The 80s Transformers movie killed off all of their characters and introduced new ones to sell more toys. Constantly introducing new characters (and letting others fall into the background) worked for them, but actively killing them off backfired badly. Transformers saw meteoric growth, from the first introduction of the comics and TV series in 1984 to the star-studded cast of the movie in 1986, then viewing figures plummeted. They misjudged how invested a large part of the audience were in their favourite characters: mainly Prime but also others. In fact they brought Prime back only one year later, though the damage was done: kids were moving on to the next fads. The decline would likely have happened anyway due to the audience moving on to other things, but the movie for all its success is credited with accelerating that significantly.
- somberi 9y agoRelated read: https://www.newyorker.com/business/currency/how-toys-r-us-succumbed-to-its-nasty-debt-problem https://www.newyorker.com/business/currency/how-toys-r-us-su...
- fermigier 9y agoMy last visits to the Toy'R'US store in Paris (13eme Arrdt) was pretty depressing. Half of the "boys" toys are Star Wars and Marvel stuff, half of the "girls" toys are Disney princesses... So maybe (IMHO) the toys industry has a licensing issue.
- wslh 9y agoYes: "As seen on TV". When I was a kid I loved toy stores for discovering new stuff like https://en.wikipedia.org/wiki/Micronauts https://en.wikipedia.org/wiki/Micronauts (ugh! it was in the 70s/80s!). Nowadays you cannot discover by going to some store and everything is overclassified (toy stores or comic toys). BTW Japan used to have better quality toys.
- oliwarner 9y agoI don't know why anybody would dive in to save a company like this. This model just doesn't work any more. Toy purchasers know exactly what they want. The often know exactly how much it costs elsewhere. The only reason they would go into a toy shop is if they need it right now. Online retail has been eating into that for years but it's coming to a head now next-day is common and same-day exists for many people.
- froindt 9y agoTo all the people I argued with online a couple months ago, looks like the executive compensation the board approved won't really matter. Everyone was up in arms about the money that the new executives could make, which was good money, but not guaranteed. They had to hit aggressive metrics to make that happen. That doesn't seem to be happening, so thousands will lose their jobs.
- dexterdog 9y agoWere you ever a kid? Toys are one of the things that you need right now even though you don't really need it right now.
- seanmcdirmid 9y agoToys R Us was an awesome place in the 80s when it was the only place to get things like video games. It was also kind of like the Xmas sears catalog, a nice place to browse and dream. Now it’s kind of obvious how we don’t need it. Losing Babies R Us, however, is going to be inconvenient.
- RyanShook 9y agoDid anyone else find it ironic that The Washington Post announced Amazon killed Toys R Us?
- untog 9y agoTo those saying Toys R Us was doomed because of toys going digital or anything like that: not so fast. > A year later the company was taken private by KKR, Bain Capital and real estate firm Vornado. The $6.6 billion purchase left it with $5.3 billion in debt secured by its assets and it never really recovered. http://money.cnn.com/2018/03/15/news/companies/toys-r-us-closing-blame/index.html http://money.cnn.com/2018/03/15/news/companies/toys-r-us-clo... Maybe the physicial toys business is totally screwed, but this isn't evidence of that. It's evidence of a company being loaded down with debt and drowning under it.
- pjc50 9y agoAh, the smoking gun. This is what happened to Maplin as well. In both cases the underlying business might be failing, but this kind of debt-encumbering buyout purchase usually results in a transfer of money from both what's left in the business and also the (bank) creditors to the capital firms.
- abricot 9y agoSo, is taking it private a way to avoid scrutiny while they bleed the company dry? Or am I completely wrong?
- uhhhhhhh 9y agoIt can be. That doesn't mean it is. Going private allows a company to focus less on shareholder value (its legal first obligation as a traded company save for a legally defendable company charter that counters this in any way, which is rarer than it should be). That theoretically allows it to focus on growth or market entrenchment before profits, and take risks otherwise you wouldn't be able to take without risks of lawsuits. It allows more freedom in restructuring and financial business decisions. The downside to that is when a vulture capitals like Bain or Ichan comes along, their motives are to extract as much profit from the 'asset' as possible for themselves regardless of the outcome to the business. It stands in start contrast to venture capital firms that actually care about success. its usually obvious which one 'investors' are. If they're willing to put up money and take risks with you at the start, they're venture. If they're coming along after you're successful but struggling with a 'grand plan' to restructure and improve your business if you accept their money (and hand over way more control than you should), they're vulture. All of that is just my observations of course. I'm open to counter arguments.
- blackoil 9y agoI would highly recommend Netflix's "The toys that made us". It has 4 episodes on GI Joe, Star Wars, He Man and Barbie. It should appeal the entrepreneurial spirit, nostalgia and in general love for toys and makers.
- andybak 9y agoThe terrible loss of jobs side - a part of me feels this is a just punishment for the most offensively bad jingle ever to be inflicted on the public. I've been meaning to look up who composed it so I can enact a terrible curse on them, their children and their children's children.
- arbuge 9y agoAmazon might have been one of the final nails in the coffin, but most of the wood came from elsewhere. The reality is that this is now another on the long list of companies killed by private equity: "The downfall of Toys “R” Us can be traced back to a $7.5 billion leveraged buyout in 2005, when Bain Capital, KKR & Co. and Vornado Realty Trust loaded the company with debt. For years, the retailer was able to refinance its debt and delay a reckoning. But the emergence of online competitors, like Amazon.com Inc., weighed on results. The company’s massive interest payments also sucked up resources that could have gone toward technology and improving operations." https://www.bloomberg.com/news/articles/2018-03-08/toys-r-us-said-to-be-prepping-liquidation-of-u-s-operations https://www.bloomberg.com/news/articles/2018-03-08/toys-r-us...
- tmaly 9y agoIt is a real shame to see this happen. My daughter loves to go into a toy store and walk around.