3 ms·

Same thing that happened to Toys R Us if I recall correctly. So sad.

• smabie 6y ago
  I mean KKR and Bain took over Toys R Us in 2005 and it filed for bankruptcy in late 2017. At the time of the LBO in 2005, Toys R Us was already hurting and not in the best place. Though we can't know the path not taken, it's probable that Toys R Us would have shut down earlier, the LBO might have been its best chance of success. Based on the articles that I've read about the LBO, I think there is an argument to made that Toys R Us was mismanaged after the takeover: a gargantuan sum was spent every year to service the debt that was taken on after the LBO. People point out that because of this, Toys R Us was unable to make the capital investments to compete with Amazon and big-box stores. But it's not clear to me that TRU could even begin to compete, even if they had the money for capital investment. Most of TRU's business is holiday gifts, which is particularly sensitive to disruption by online retailers. No one is stopping into TRU at the last minute for same household staple, everytime someone needs a toy you know in advance (birthdays, holidays, etc). Because of this, how could they ever have competed with Amazon?