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In 2003, in the pit of a recession, Toys 'R' Us was still profitable. It got caught flat-footed by the proliferation of Walmart/Target and online sales at the

In 2003, in the pit of a recession, Toys 'R' Us was still profitable. It got caught flat-footed by the proliferation of Walmart/Target and online sales at the same time. Bain and KKR's turn-round strategy was largely a joke: They basically floated a bunch of trial balloons to the press, arguing that they weren't going to just be a toy store anymore (basically become a walmart or target) but that was scuttled. After that, they just decided to control costs as tightly as possible. Very little innovation. Prior to the buyout, there was a team inside Toys 'R' Us that was trying to clone Amazon's e-commerce success. It died with the buyout. Bain and KKR thought they had a better plan: they didn't.

Spooky23 9y ago
The "turn around strategy" was do make the minimum viable noise that a turn around was in progress to avoid legal issues, borrow a metric ass-ton based on the assets that the company had, collect fees, etc. Everyone wins except for whomever was stuck holding the bag on the debt.
- deleted 9y ago
  [deleted]
JumpCrisscross 9y ago
> there was a team inside Toys 'R' Us that was trying to clone Amazon's e-commerce success If we flipped roles, with the team inside Toys 'R' Us trying to control costs before the PE firms came in and tried to make Amazon competitor, it would sound equally damning.
- gascan 9y ago
  Would it? Has "control costs" ever worked out as a viable long term strategy in a business that is rapidly losing market share to a sea-change in competitors?
  - listenallyall 9y ago
    AMD's stock was under $3 when this article was published, in Oct 2014. Today it is over $10. https://www.wsj.com/articles/overheard-amd-cutting-costs-1413585056 https://www.wsj.com/articles/overheard-amd-cutting-costs-141...
    - gascan 9y ago
      Good point, although that wouldn't have meant anything if they kept plodding along with the Bulldozer family. Cut costs + bring new Ryzen chips to market, both parts were needed.
      - listenallyall 9y ago
        Of course... the cost-cutting just stops/reduces the bleeding, extending the company's runway so that it can survive longer without running out of cash. The company still has to come up with a new product or strategy, in AMD's case it was Ryzen.

Spooky23 9y ago

The "turn around strategy" was do make the minimum viable noise that a turn around was in progress to avoid legal issues, borrow a metric ass-ton based on the assets that the company had, collect fees, etc. Everyone wins except for whomever was stuck holding the bag on the debt.

deleted 9y ago
[deleted]

JumpCrisscross 9y ago

> there was a team inside Toys 'R' Us that was trying to clone Amazon's e-commerce success If we flipped roles, with the team inside Toys 'R' Us trying to control costs before the PE firms came in and tried to make Amazon competitor, it would sound equally damning.

gascan 9y ago
Would it? Has "control costs" ever worked out as a viable long term strategy in a business that is rapidly losing market share to a sea-change in competitors?
- listenallyall 9y ago
  AMD's stock was under $3 when this article was published, in Oct 2014. Today it is over $10. https://www.wsj.com/articles/overheard-amd-cutting-costs-1413585056 https://www.wsj.com/articles/overheard-amd-cutting-costs-141...
  - gascan 9y ago
    Good point, although that wouldn't have meant anything if they kept plodding along with the Bulldozer family. Cut costs + bring new Ryzen chips to market, both parts were needed.
    - listenallyall 9y ago
      Of course... the cost-cutting just stops/reduces the bleeding, extending the company's runway so that it can survive longer without running out of cash. The company still has to come up with a new product or strategy, in AMD's case it was Ryzen.