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I think Amazon should do it. I personally believe Toys R Us just missed an opportunity to run a proper business. They have a ton of retail space, but every tim

I think Amazon should do it. I personally believe Toys R Us just missed an opportunity to run a proper business. They have a ton of retail space, but every time I've been there, it's run like Walmart. Shit everywhere, no one to help you find anything, etc... There's nothing suburban parents like me want more than an indoor play space for my kid (for extremely hot or cold days). If they properly utilized their store and made it more like a play space, I would bring my kid there every weekend. Right now I am paying money to go to those "kids museum". Why didn't Toys R Us think to capitalize on that market? Also, if they had people to playfully demo the toys to my kid, I am pretty sure we would buy way more toys instead of just leaving frustrated because we can't find what we wanted.

tonyedgecombe 9y ago
Shit everywhere, no one to help you find anything, etc... It would fit right in with Amazons style of business then.
- jimmy1 9y ago
  Amazon has a search engine, recommendations, and 24/7 customer support to help you find what ever you need.
  - josefresco 9y ago
    24/7 customer support: TIL
  - km3k 9y ago
    Amazon customer support helps you select items to buy?
- filoleg 9y ago
  After visiting retail Amazon bookstores on more than one occasion, I have to strongly disagree with your vision of possible Amazon retail ventures.
- nolok 9y ago
  But that's the whole point, if both are the same on that aspect, and amazon has a larger catalog size, and I already have evening/next day delivery from amazon anyway, why would I bother going the to the toy store ? The whole point he was making is, once amazon existed, they failed to compete with it. You're a physical store, you have the possibility to interact with people, offer them things they can't have over the internet, use it. If you don't, you're wasting a lot of money on prime rent.
  - scarface74 9y ago
    As I posted previously, toys r us didn't just "fail to compete with them", they actually helped Amazon to build their own department by turning over responsibility of toysrus.com to Amazon.
MadBohr 9y ago
It's important to note that a lot of the failure of Toys R Us has to do with private equity buyout rather than a poor business model. Of course, their business model was flawed, but remember that Toys R Us was bought in 2005, and the toy market was MUCH simpler back then. Amazon was hardly the player it is now. The private equity firm then loaded them up with crippling debt. Move forward a few years, and enter Amazon et al, and market situations shifted drastically. Toys R Us, loaded with debt from the private equity buyout, could not invest in their own infrastructure and improvements. Even if they had the perfect business model to capitalize on, they would have no cash to execute, and regardless, they would be forced to bankruptcy. In this case, they had so much debt that they couldn't escape chapter 11 and had to resort to chapter 7. And so it goes.
- ceejayoz 9y ago
  Cite for the above: https://www.bloomberg.com/news/articles/2018-03-16/who-killed-geoffrey-the-giraffe-the-last-days-of-toys-r-us https://www.bloomberg.com/news/articles/2018-03-16/who-kille... Buy company. Take out massive debts on company's books. Withdraw hundreds of millions in "fees". Let company collapse. Rinse, repeat.
  - MadBohr 9y ago
    NY Times also has a good article on it: https://www.nytimes.com/2018/03/15/business/toys-r-us-bankruptcy.html https://www.nytimes.com/2018/03/15/business/toys-r-us-bankru...
  - olivermarks 9y ago
    Taking a corporation private, loading it with billions in debt, starving it of funding and sucking it dry before collapse should be a criminal offense IMO
    - MadBohr 9y ago
      Unfortunately that's the nature of business. Sometimes it's impossible to predict market situations 10, 15 years out. I doubt anybody at Bain could have predicted in 2005 that Amazon would completely dominate the retail market in 10 years. Also, some responsibility falls on the debtors themselves for taking on potentially risky investments, but there are so many loopholes and gotchas here that I really can't comment much on that. While this type of private equity story seems more and more common these days, the opposite happens fairly often as well, and private equity firms like Bain make insane amounts of money from these types of strategies. Bankruptcy in general is shady though and no matter what, when it happens, somebody is getting screwed out of a lot of money... usually the debtors.
gedy 9y ago
Issue is, a company does that and then parents still search and buy the toy for cheaper on Amazon from their phone. I have family members who run a small retail store with excellent inventory and service, and they barely scrape by due to people show rooming. They are not in toys, but they simply cannot compete on price, as Amazon, etc sells it cheaper than they can buy from the suppliers.
- xapata 9y ago
  If Amazon sells it cheaper, they could act somewhat as an Amazon affiliate. Or at least buy from Amazon instead of their more expensive suppliers.
  - unpwn 9y ago
    Probably amazon buys it from the same supplier, but they can sell it for less margin, because they don't have the overhead of running a store, and they have the scale of being amazon.
    - xapata 9y ago
      > sells it cheaper than they can buy from the suppliers Perhaps they miswrote, but the comment says that Amazon is cheaper than the supplier. It's somewhat common for a large manufacturer to accidentally undercut themselves. For example, one branch selling to Walmart and another selling direct to restaurants. Sometimes the price at Walmart, even after Walmart's margin, is cheaper than the direct price. The restaurant-sales group is horrified as they lose customers to Walmart and goes running down the hall to tell the bigbox-sales group to raise prices.
- MadBohr 9y ago
  People will generally pay a premium for better service, but in the case of retail, it's usually hard to beat the service of "instant purchase with free two day delivery to my doorstep". I for one, very rarely buy something w/o checking if it's cheaper on Amazon (or some other online retailer) first. It's gotta be a tough market that's for sure.
aswanson 9y ago
Youre right. There's something unclean and bad about the aesthetics...its like stuck in the 1980s. They need someone that can redesign and modernize it. Whoever did that work for Target would probably know what precisely to do.
- kirykl 9y ago
  That Target guy is Ron Johnson, the same one who built Apple retail and tried to help JC Penney
  - fullshark 9y ago
    He almost destroyed JC Penney
    - kirykl 9y ago
      JC Penney had failed before they brought him in. It's now just slowly dying. They've even had to sell off their HQ http://fortune.com/2017/01/03/jcpenney-headquarters-debt/ http://fortune.com/2017/01/03/jcpenney-headquarters-debt/
      - fullshark 9y ago
        Perhaps, but there was almost no positive returns from his ideas there. He seemed to fundamentally misunderstand the JC Penney customer. I don't think it was a case of abandoning a good plan due to lack of patience, the entire strategy (eliminate sales, make it like a mini mall with its own sub stores) seemed ill conceived and was a disaster.
  - ethbro 9y ago
    I hadn't been in a Target in awhile, but popped in an intown location the other day. Wow. I was definitely impressed. For a chain that used to be "the other Walmart", the design and general feel of the store was miles different today. So hats off to Mr. Johnson, and Target for hiring him. Side note: Having a Starbucks in-store at Targets is brilliant. I imagine the deal works out financially for both parties, and Target gets to affluence-signal "we're the type of store that Starbucks people shop at."
mox1 9y ago
Their current business model is (was?) to price everything in the store 5-20% higher than elsewhere, but then offer coupons, sales, etc. to offset that. When our daughter was born we price compared them for a lot of big ticket items, but ultimately just bought online or at Target / Walmart. A few times a year they have a good deal on something (again with coupons) so we purchase, but walking into the store blind shopping is basically just paying a 15% corporate convenience fee. If they were price competitive with others, I would have stopped in there a lot more, but oh well.
- filoleg 9y ago
  Their abhorrent aka non-existent return policies too. I am not a serial returner, but the inability to do so doesn't help in their favor when I am making a decision on where to buy.
- lph 9y ago
  They will price match with other stores. I was in there last weekend to spend a gift card and knocked about 20% off the prices by price matching Amazon.
daxorid 9y ago
Maybe their operations were suboptimal, I don't know - but the PRIMARY reason they went under is because Bain Capital conducted an LBO, sucked a ton of value out from coupon payments, pushed its own debt obligations back onto Toys R Us, then left it to die.
jobu 9y ago
> I personally believe Toys R Us just missed an opportunity to run a proper business. Toys R Us has been struggling to pay off $6 billion in debt from the Bain Capital takeover in 2005. They didn't have the capital or the margins to invest in maintaining their stores, let alone competing with Amazon. Buying a company with debt and then forcing that company to pay off that debt is fairly common, but for some reason it surprises me that it's actually legal. Why isn't Bain forced to pay off the debts when the company goes under? https://www.forbes.com/sites/walterloeb/2018/03/19/bain-capital-sees-three-investments-stumble-toys-r-us-guitar-center-and-iheartmedia/ https://www.forbes.com/sites/walterloeb/2018/03/19/bain-capi...
- lbotos 9y ago
  Isn't that the nature of a business in America? It acts as a "corporate veil" and as long as you aren't using business funds inappropriately, the business is the "last stop".
  - rando444 9y ago
    The person you are replying to is making a point about leveraged buyouts and how they can be used by unscrupulous wall street types to milk and destroy an otherwise profitable industry. https://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829 https://www.rollingstone.com/politics/news/greed-and-debt-th...
- stupandaus 9y ago
  To answer your question, the debt holders take precedence over the equity holders like Bain Capital, and generally being an equity holder and having your equity stake wiped to $0 is not a good outcome for a private equity firm. Bain does have to pay off debts - that is what the liquidation of assets is being done for - to pay off debts to the debt holders. Bain doesn't get to keep those assets.
  - Retric 9y ago
    This assumes they occur post bankruptcy. Looting a company involves dept then dividends from selling off assets to the point a company can't make debt payments. The money is already gone by the time the company can't pay, so they don't care what happens to the shell at that point.
TorKlingberg 9y ago
How does running a play space with lots of staff fit into Amazon's business model?
- jasonjayr 9y ago
  How may physical stores complain that shoppers go in, examine the objects on the shelf, and then compare to Amazon via their phone to just finish the purchase there? If Amazon ran the store, they could just buy it right there @ Amazon prices, and within the Amazon ecosystem That would kill the other stores.
  - lph 9y ago
    If Amazon ran the store, they would have the same retail overhead costs as all the places they're undercutting...
s73v3r_ 9y ago
Toys R Us had a proper business. If they didn't get saddled by debt thanks to private equity, they'd still be around. The private equity practice of saddling the company you're buying with the debt you used to buy it should be banned. There is absolutely nothing worthwhile that comes from it.
drdeadringer 9y ago
> There's nothing suburban parents like me want more than an indoor play space for my kid (for extremely hot or cold days) Funny enough, a new cafe opened up a few blocks from where I live with this in mind. About half of the customer space is a play area for smallish children, and the other half is "normal" with tables and chairs... My point being that it doesn't need to be limited to toy stores or kiddie museums, even if this particular cafe boards up shop.
0x4f3759df 9y ago
Reminds me of the story of Disneyland: "The concept for Disneyland began when Walt Disney was visiting Griffith Park in Los Angeles with his daughters Diane and Sharon. While watching them ride the merry-go-round, he came up with the idea of a place where adults and their children could go and have fun together, though his dream lay dormant for many years" It seems like in this experience economy when we all have enough basic material goods, there should be a market for something like what your describing.
mikeleeorg 9y ago
Amazon seems only interested in buying the real estate, not the Toys R Us brand or business. Here's a quote from the article: "The online giant isn’t interested in maintaining the Toys “R” Us brand, but has considered using the soon-to-be-vacant spaces for its own purposes, said the people, who asked not to be identified because the talks are private."
spike021 9y ago
This sounds like a nightmare, though. Obviously people go to mall play areas and whatnot already for the scenarios you mentioned, but the germs and everything to deal with would be even worse for this IMO.
InclinedPlane 9y ago
Once more, for those in the back: Toys R Us was profitable. Period. They were acquired by predatory capital companies (Bain Capital) via a leveraged buyout which loaded them down with huge debt repayments. The new owners extracted massive amounts of money from Toys R Us and then let them die as they were crushed under their debt burden. This is not a story of a company that failed to keep up with modern times, Toys R Us had a long profitable life ahead of it. This is a story of corporate predation, one company killing another in order to feast on the carcass. Bain Capital basically pocketed hundreds of millions of dollars while leaving Toys R Us customers and employees as well as private banks holding the bag.
acct1771 9y ago
Since nobody else thought it appropriate to mention, I'll bite the bullet: the person you're imagining being playful with the toys to see which one your kid likes has historically been you.

tonyedgecombe 9y ago

Shit everywhere, no one to help you find anything, etc... It would fit right in with Amazons style of business then.

jimmy1 9y ago
Amazon has a search engine, recommendations, and 24/7 customer support to help you find what ever you need.
- josefresco 9y ago
  24/7 customer support: TIL
- km3k 9y ago
  Amazon customer support helps you select items to buy?
filoleg 9y ago
After visiting retail Amazon bookstores on more than one occasion, I have to strongly disagree with your vision of possible Amazon retail ventures.
nolok 9y ago
But that's the whole point, if both are the same on that aspect, and amazon has a larger catalog size, and I already have evening/next day delivery from amazon anyway, why would I bother going the to the toy store ? The whole point he was making is, once amazon existed, they failed to compete with it. You're a physical store, you have the possibility to interact with people, offer them things they can't have over the internet, use it. If you don't, you're wasting a lot of money on prime rent.
- scarface74 9y ago
  As I posted previously, toys r us didn't just "fail to compete with them", they actually helped Amazon to build their own department by turning over responsibility of toysrus.com to Amazon.

MadBohr 9y ago

It's important to note that a lot of the failure of Toys R Us has to do with private equity buyout rather than a poor business model. Of course, their business model was flawed, but remember that Toys R Us was bought in 2005, and the toy market was MUCH simpler back then. Amazon was hardly the player it is now. The private equity firm then loaded them up with crippling debt. Move forward a few years, and enter Amazon et al, and market situations shifted drastically. Toys R Us, loaded with debt from the private equity buyout, could not invest in their own infrastructure and improvements. Even if they had the perfect business model to capitalize on, they would have no cash to execute, and regardless, they would be forced to bankruptcy. In this case, they had so much debt that they couldn't escape chapter 11 and had to resort to chapter 7. And so it goes.

ceejayoz 9y ago
Cite for the above: https://www.bloomberg.com/news/articles/2018-03-16/who-killed-geoffrey-the-giraffe-the-last-days-of-toys-r-us https://www.bloomberg.com/news/articles/2018-03-16/who-kille... Buy company. Take out massive debts on company's books. Withdraw hundreds of millions in "fees". Let company collapse. Rinse, repeat.
- MadBohr 9y ago
  NY Times also has a good article on it: https://www.nytimes.com/2018/03/15/business/toys-r-us-bankruptcy.html https://www.nytimes.com/2018/03/15/business/toys-r-us-bankru...
- olivermarks 9y ago
  Taking a corporation private, loading it with billions in debt, starving it of funding and sucking it dry before collapse should be a criminal offense IMO
  - MadBohr 9y ago
    Unfortunately that's the nature of business. Sometimes it's impossible to predict market situations 10, 15 years out. I doubt anybody at Bain could have predicted in 2005 that Amazon would completely dominate the retail market in 10 years. Also, some responsibility falls on the debtors themselves for taking on potentially risky investments, but there are so many loopholes and gotchas here that I really can't comment much on that. While this type of private equity story seems more and more common these days, the opposite happens fairly often as well, and private equity firms like Bain make insane amounts of money from these types of strategies. Bankruptcy in general is shady though and no matter what, when it happens, somebody is getting screwed out of a lot of money... usually the debtors.

gedy 9y ago

Issue is, a company does that and then parents still search and buy the toy for cheaper on Amazon from their phone. I have family members who run a small retail store with excellent inventory and service, and they barely scrape by due to people show rooming. They are not in toys, but they simply cannot compete on price, as Amazon, etc sells it cheaper than they can buy from the suppliers.

xapata 9y ago
If Amazon sells it cheaper, they could act somewhat as an Amazon affiliate. Or at least buy from Amazon instead of their more expensive suppliers.
- unpwn 9y ago
  Probably amazon buys it from the same supplier, but they can sell it for less margin, because they don't have the overhead of running a store, and they have the scale of being amazon.
  - xapata 9y ago
    > sells it cheaper than they can buy from the suppliers Perhaps they miswrote, but the comment says that Amazon is cheaper than the supplier. It's somewhat common for a large manufacturer to accidentally undercut themselves. For example, one branch selling to Walmart and another selling direct to restaurants. Sometimes the price at Walmart, even after Walmart's margin, is cheaper than the direct price. The restaurant-sales group is horrified as they lose customers to Walmart and goes running down the hall to tell the bigbox-sales group to raise prices.
MadBohr 9y ago
People will generally pay a premium for better service, but in the case of retail, it's usually hard to beat the service of "instant purchase with free two day delivery to my doorstep". I for one, very rarely buy something w/o checking if it's cheaper on Amazon (or some other online retailer) first. It's gotta be a tough market that's for sure.

aswanson 9y ago

Youre right. There's something unclean and bad about the aesthetics...its like stuck in the 1980s. They need someone that can redesign and modernize it. Whoever did that work for Target would probably know what precisely to do.

kirykl 9y ago
That Target guy is Ron Johnson, the same one who built Apple retail and tried to help JC Penney
- fullshark 9y ago
  He almost destroyed JC Penney
  - kirykl 9y ago
    JC Penney had failed before they brought him in. It's now just slowly dying. They've even had to sell off their HQ http://fortune.com/2017/01/03/jcpenney-headquarters-debt/ http://fortune.com/2017/01/03/jcpenney-headquarters-debt/
    - fullshark 9y ago
      Perhaps, but there was almost no positive returns from his ideas there. He seemed to fundamentally misunderstand the JC Penney customer. I don't think it was a case of abandoning a good plan due to lack of patience, the entire strategy (eliminate sales, make it like a mini mall with its own sub stores) seemed ill conceived and was a disaster.
- ethbro 9y ago
  I hadn't been in a Target in awhile, but popped in an intown location the other day. Wow. I was definitely impressed. For a chain that used to be "the other Walmart", the design and general feel of the store was miles different today. So hats off to Mr. Johnson, and Target for hiring him. Side note: Having a Starbucks in-store at Targets is brilliant. I imagine the deal works out financially for both parties, and Target gets to affluence-signal "we're the type of store that Starbucks people shop at."

mox1 9y ago

Their current business model is (was?) to price everything in the store 5-20% higher than elsewhere, but then offer coupons, sales, etc. to offset that. When our daughter was born we price compared them for a lot of big ticket items, but ultimately just bought online or at Target / Walmart. A few times a year they have a good deal on something (again with coupons) so we purchase, but walking into the store blind shopping is basically just paying a 15% corporate convenience fee. If they were price competitive with others, I would have stopped in there a lot more, but oh well.

filoleg 9y ago
Their abhorrent aka non-existent return policies too. I am not a serial returner, but the inability to do so doesn't help in their favor when I am making a decision on where to buy.
lph 9y ago
They will price match with other stores. I was in there last weekend to spend a gift card and knocked about 20% off the prices by price matching Amazon.

daxorid 9y ago

Maybe their operations were suboptimal, I don't know - but the PRIMARY reason they went under is because Bain Capital conducted an LBO, sucked a ton of value out from coupon payments, pushed its own debt obligations back onto Toys R Us, then left it to die.

jobu 9y ago

> I personally believe Toys R Us just missed an opportunity to run a proper business. Toys R Us has been struggling to pay off $6 billion in debt from the Bain Capital takeover in 2005. They didn't have the capital or the margins to invest in maintaining their stores, let alone competing with Amazon. Buying a company with debt and then forcing that company to pay off that debt is fairly common, but for some reason it surprises me that it's actually legal. Why isn't Bain forced to pay off the debts when the company goes under? https://www.forbes.com/sites/walterloeb/2018/03/19/bain-capital-sees-three-investments-stumble-toys-r-us-guitar-center-and-iheartmedia/ https://www.forbes.com/sites/walterloeb/2018/03/19/bain-capi...

lbotos 9y ago
Isn't that the nature of a business in America? It acts as a "corporate veil" and as long as you aren't using business funds inappropriately, the business is the "last stop".
- rando444 9y ago
  The person you are replying to is making a point about leveraged buyouts and how they can be used by unscrupulous wall street types to milk and destroy an otherwise profitable industry. https://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829 https://www.rollingstone.com/politics/news/greed-and-debt-th...
stupandaus 9y ago
To answer your question, the debt holders take precedence over the equity holders like Bain Capital, and generally being an equity holder and having your equity stake wiped to $0 is not a good outcome for a private equity firm. Bain does have to pay off debts - that is what the liquidation of assets is being done for - to pay off debts to the debt holders. Bain doesn't get to keep those assets.
- Retric 9y ago
  This assumes they occur post bankruptcy. Looting a company involves dept then dividends from selling off assets to the point a company can't make debt payments. The money is already gone by the time the company can't pay, so they don't care what happens to the shell at that point.

TorKlingberg 9y ago

How does running a play space with lots of staff fit into Amazon's business model?

jasonjayr 9y ago
How may physical stores complain that shoppers go in, examine the objects on the shelf, and then compare to Amazon via their phone to just finish the purchase there? If Amazon ran the store, they could just buy it right there @ Amazon prices, and within the Amazon ecosystem That would kill the other stores.
- lph 9y ago
  If Amazon ran the store, they would have the same retail overhead costs as all the places they're undercutting...

s73v3r_ 9y ago

Toys R Us had a proper business. If they didn't get saddled by debt thanks to private equity, they'd still be around. The private equity practice of saddling the company you're buying with the debt you used to buy it should be banned. There is absolutely nothing worthwhile that comes from it.

drdeadringer 9y ago

> There's nothing suburban parents like me want more than an indoor play space for my kid (for extremely hot or cold days) Funny enough, a new cafe opened up a few blocks from where I live with this in mind. About half of the customer space is a play area for smallish children, and the other half is "normal" with tables and chairs... My point being that it doesn't need to be limited to toy stores or kiddie museums, even if this particular cafe boards up shop.

0x4f3759df 9y ago

Reminds me of the story of Disneyland: "The concept for Disneyland began when Walt Disney was visiting Griffith Park in Los Angeles with his daughters Diane and Sharon. While watching them ride the merry-go-round, he came up with the idea of a place where adults and their children could go and have fun together, though his dream lay dormant for many years" It seems like in this experience economy when we all have enough basic material goods, there should be a market for something like what your describing.

mikeleeorg 9y ago

Amazon seems only interested in buying the real estate, not the Toys R Us brand or business. Here's a quote from the article: "The online giant isn’t interested in maintaining the Toys “R” Us brand, but has considered using the soon-to-be-vacant spaces for its own purposes, said the people, who asked not to be identified because the talks are private."

spike021 9y ago

This sounds like a nightmare, though. Obviously people go to mall play areas and whatnot already for the scenarios you mentioned, but the germs and everything to deal with would be even worse for this IMO.

InclinedPlane 9y ago

Once more, for those in the back: Toys R Us was profitable. Period. They were acquired by predatory capital companies (Bain Capital) via a leveraged buyout which loaded them down with huge debt repayments. The new owners extracted massive amounts of money from Toys R Us and then let them die as they were crushed under their debt burden. This is not a story of a company that failed to keep up with modern times, Toys R Us had a long profitable life ahead of it. This is a story of corporate predation, one company killing another in order to feast on the carcass. Bain Capital basically pocketed hundreds of millions of dollars while leaving Toys R Us customers and employees as well as private banks holding the bag.

acct1771 9y ago

Since nobody else thought it appropriate to mention, I'll bite the bullet: the person you're imagining being playful with the toys to see which one your kid likes has historically been you.