4 ms·

There’s a special place in hell reserved for private equity firms. I hear it’s for sale.

by adfm 1y ago

gosub100 1y ago
do you think that had PE not been involved, Toys would be the same as it was in 1991 [1]? Glass cases with RC cars and hovercraft? Glue-together models, Hot Wheels? The times change, even though I agree with you that PE sucks. Besides, if it were merely PE then wouldn't that create new opportunity for people to start their own local toystores? If it were merely PE then the market to buy toys would remain unchanged, wouldn't it? 1. https://youtu.be/KsebX5Gd2Ao?si=YPbNBW_Xw3dHmcQw https://youtu.be/KsebX5Gd2Ao?si=YPbNBW_Xw3dHmcQw
- rediguanayum 1y ago
  Problem is PE stresses a company out such that they don't have runway to adapt. In the end, the consumer is still less well served by fewer choices and higher prices.
  - gosub100 1y ago
    if the market existed, then a new toy store would appear. I'm saying the market for what TRU provided had disappeared.
    - jtuple 1y ago
      > I'm saying the market for what TRU provided had disappeared The market still exists, doesn't it? Kids still exist, kids still play with toys. People simply buy toys from Amazon now, not TRU. Just like people buy electronics from Amazon, not Best Buy/Circuit City. And shoes from Amazon/Zappos, not Payless. Seems like most retail markets still exist, they've just been cornered by the giant "Everything Store". IMO, physical toy stores should be competitive to e-commerce with the right strategy. Simply going to the store could be an exciting adventure into itself, with higher fidelity discovery than a screen provides. Esp. post-COVID where people are opting more for analog/offline options after online/lockdown burnout. Claiming TRU's market disappeared feels similar to claiming the bookstore market disappeared, yet Barnes and Noble had a well documented and surprising comeback by shifting strategy: https://news.ycombinator.com/item?id=34165960 https://news.ycombinator.com/item?id=34165960
      - lotsofpulp 1y ago
        The market exists at a far lower valuation. 90% of the sales will go to Walmart/Costco/Target/Amazon/Aliexpress/Kroger/etc, 10% will go to the remaining businesses. You might go to the local toy store every now and then and pay 2x or more for the same toy just so your kid feels the ambiance of shopping in a toy store or supporting a local business, but the majority of your purchases will not happen there, certainly not enough to supporter the huge Toys R Us stores of the past.
      - gosub100 1y ago
        > , kids still play with toys. meaningless statement without quantity. kids don't play outside or with each other at the same rate as they did 35 years ago. video games and smart phones are vastly replacing physical toys.
      - Sohcahtoa82 1y ago
        > Just like people buy electronics from Amazon, not Best Buy/Circuit City. I've heard Best Buy referred to as "Amazon's Showroom". People would go there to look at a TV, then buy from Amazon or ask BB to price match Amazon.
    - OccamsMirror 1y ago
      As a parent, I can assure you that the market for Toys 'R' Us still exists. The problem is that to become a TRU requires a lot of capital. More than anyone is likely to risk in 2025. It's sad. I would love to take my kids to a 90s TRU.
      - solumunus 1y ago
        Worthwhile high capital business models are pursued all the time. The problem is that the business model is no longer competitive. If it was competitive it would be competing.
    - beowulfey 1y ago
      Small mom and pop toy stores have replaced the big box toy stores of yesteryear, quite successfully I would say (at least in our area)
    - nicholassmith 1y ago
      In the UK the toy chains The Entertainer and Smyths both expanded to fill the market, both usually seem to have a decent amount of footfall. Toys are an interesting product as the target market is, for the most part, not an online shopper.
  - pfdietz 1y ago
    PE isn't trying to turn the company around in these cases, or at least only trying to do that; when the company is truly doomed PE is trying to maximize the value obtained before it expires. They're serving a useful role in the capitalist ecosystem.
- minton 1y ago
  They had electronics and legos, not just models and hot wheels. I think they’d have adapted like most businesses have.
  - gosub100 1y ago
    I think they didn't adapt and thats why they no longer exist
    - fknorangesite 1y ago
      You're factually wrong, as described in the linked case study and a million other similar ones - whether they're about Toys R Us specifically or otherwise. Toys R Us still exists where I live (Canada). I admit I don't go in often outside of holiday shopping, but it's still the same Toys R Us it's always been, natural shifts in toy inventory notwithstanding, of course. I'm not sure why you're riding for the predatory PE firms, here. "That's why they don't exist"? My brother in Christ, they still do - and still would if it weren't for this aggressive bullshit.
      - listenallyall 1y ago
        How is he "riding for PE firms"? The writing was on the wall for Toys R Us (in the US at least) long before they went private. It had been surpassed by WalMart, speciality stores like GameStop were increasingly stealing valuable segments, the company's online presence failed, and online competition from Amazon and other retailers was just getting started. Meanwhile physical Toys R Us stores were the exact opposite of "comfortable" or "welcoming" - think Staples for toys. Nothing is impossible but their survival was really only feasible with a "burn it all down and start over again" strategy, not just small tweaks to the legacy Toys R Us model.
      - gosub100 1y ago
        > I'm not sure why you're riding for the predatory PE firms, here. from my original post: "even though I agree with you that PE sucks." if you're missing basic points like that, no wonder you're confused.
- sulam 1y ago
  Or they could have been Barnes & Noble.
- adfm 1y ago
  PE is a crude tool for crude extraction. Honestly, the last time I found myself in a TRU, I had to leave because the off gassing was overwhelming. So no, not 1991, but likely something very 2025. If they still sell sugar water and cereal boxes at the grocery store, there's a market for TRU. pew pew.
  - adfm 1y ago
    Here’s a video that breaks down the TRU PE mechanics: https://youtube.com/shorts/AuiHC_DuAAM?si=sogV_hJCOhYXHNwe https://youtube.com/shorts/AuiHC_DuAAM?si=sogV_hJCOhYXHNwe
- greenavocado 1y ago
  Kids know absolutely nothing when they are born but they generally have a strong instinct to play with certain kinds of toys regardless of their short life experience. There is not much reason to force innovation in this sector.
  - listenallyall 1y ago
    It's not toys that need innovation but the Toys R Us business model. I loved going there as a kid too but it had been surpassed by WalMart in toy sales volume long before it went private. Target was probably close if not surpassed it, and video game sales were taken over by more convenient (and way more fun) GameStops. TOY stock had dropped a ton, and really was only hanging in there due to Babies R Us. All of this before Amazon was a serious retailer of anything besides books (meanwhile toysrus.com was a disaster that they took offline). It's a fun place to remember but I'm pretty sure if you walked into a replica Toys R Us from 1998 today you'd immediately be overwhelmed by suckiness - the horrible fluorescent lighting, zero customer service, lack of furnishings (Costco stores look nicer), nothing to actually try or play with, prices that weren't too competitive.
    - mst 1y ago
      It does kinda make sense to me that the various non-US subsidiaries that survived did so at least in part because those places didn't have anything like Walmart. Whether they'll be able to continue to survive in a world containing the current incarnation of Amazon is a different question and I've honestly no idea how that will turn out.
- freeAgent 1y ago
  Toys R Us also sold stuff like video games and collectible/trading cards…and bikes, etc., I think, at least when I was a kid. I’m sure their product mix would have continued to evolve, but if you do have children, you probably know that they still love physical toys like Hot Wheels, dolls/action figures, LEGO, etc. That will probably never change.

There’s a special place in hell reserved for private equity firms. I hear it’s for sale.

by adfm 1y ago

There’s a special place in hell reserved for private equity firms. I hear it’s for sale.

do you think that had PE not been involved, Toys would be the same as it was in 1991 [1]? Glass cases with RC cars and hovercraft? Glue-together models, Hot Wheels? The times change, even though I agree with you that PE sucks. Besides, if it were merely PE then wouldn't that create new opportunity for people to start their own local toystores? If it were merely PE then the market to buy toys would remain unchanged, wouldn't it? 1. https://youtu.be/KsebX5Gd2Ao?si=YPbNBW_Xw3dHmcQw https://youtu.be/KsebX5Gd2Ao?si=YPbNBW_Xw3dHmcQw

rediguanayum 1y ago
Problem is PE stresses a company out such that they don't have runway to adapt. In the end, the consumer is still less well served by fewer choices and higher prices.
- gosub100 1y ago
  if the market existed, then a new toy store would appear. I'm saying the market for what TRU provided had disappeared.
  - jtuple 1y ago
    > I'm saying the market for what TRU provided had disappeared The market still exists, doesn't it? Kids still exist, kids still play with toys. People simply buy toys from Amazon now, not TRU. Just like people buy electronics from Amazon, not Best Buy/Circuit City. And shoes from Amazon/Zappos, not Payless. Seems like most retail markets still exist, they've just been cornered by the giant "Everything Store". IMO, physical toy stores should be competitive to e-commerce with the right strategy. Simply going to the store could be an exciting adventure into itself, with higher fidelity discovery than a screen provides. Esp. post-COVID where people are opting more for analog/offline options after online/lockdown burnout. Claiming TRU's market disappeared feels similar to claiming the bookstore market disappeared, yet Barnes and Noble had a well documented and surprising comeback by shifting strategy: https://news.ycombinator.com/item?id=34165960 https://news.ycombinator.com/item?id=34165960
    - lotsofpulp 1y ago
      The market exists at a far lower valuation. 90% of the sales will go to Walmart/Costco/Target/Amazon/Aliexpress/Kroger/etc, 10% will go to the remaining businesses. You might go to the local toy store every now and then and pay 2x or more for the same toy just so your kid feels the ambiance of shopping in a toy store or supporting a local business, but the majority of your purchases will not happen there, certainly not enough to supporter the huge Toys R Us stores of the past.
    - gosub100 1y ago
      > , kids still play with toys. meaningless statement without quantity. kids don't play outside or with each other at the same rate as they did 35 years ago. video games and smart phones are vastly replacing physical toys.
    - Sohcahtoa82 1y ago
      > Just like people buy electronics from Amazon, not Best Buy/Circuit City. I've heard Best Buy referred to as "Amazon's Showroom". People would go there to look at a TV, then buy from Amazon or ask BB to price match Amazon.
  - OccamsMirror 1y ago
    As a parent, I can assure you that the market for Toys 'R' Us still exists. The problem is that to become a TRU requires a lot of capital. More than anyone is likely to risk in 2025. It's sad. I would love to take my kids to a 90s TRU.
    - solumunus 1y ago
      Worthwhile high capital business models are pursued all the time. The problem is that the business model is no longer competitive. If it was competitive it would be competing.
  - beowulfey 1y ago
    Small mom and pop toy stores have replaced the big box toy stores of yesteryear, quite successfully I would say (at least in our area)
  - nicholassmith 1y ago
    In the UK the toy chains The Entertainer and Smyths both expanded to fill the market, both usually seem to have a decent amount of footfall. Toys are an interesting product as the target market is, for the most part, not an online shopper.
- pfdietz 1y ago
  PE isn't trying to turn the company around in these cases, or at least only trying to do that; when the company is truly doomed PE is trying to maximize the value obtained before it expires. They're serving a useful role in the capitalist ecosystem.
minton 1y ago
They had electronics and legos, not just models and hot wheels. I think they’d have adapted like most businesses have.
- gosub100 1y ago
  I think they didn't adapt and thats why they no longer exist
  - fknorangesite 1y ago
    You're factually wrong, as described in the linked case study and a million other similar ones - whether they're about Toys R Us specifically or otherwise. Toys R Us still exists where I live (Canada). I admit I don't go in often outside of holiday shopping, but it's still the same Toys R Us it's always been, natural shifts in toy inventory notwithstanding, of course. I'm not sure why you're riding for the predatory PE firms, here. "That's why they don't exist"? My brother in Christ, they still do - and still would if it weren't for this aggressive bullshit.
    - listenallyall 1y ago
      How is he "riding for PE firms"? The writing was on the wall for Toys R Us (in the US at least) long before they went private. It had been surpassed by WalMart, speciality stores like GameStop were increasingly stealing valuable segments, the company's online presence failed, and online competition from Amazon and other retailers was just getting started. Meanwhile physical Toys R Us stores were the exact opposite of "comfortable" or "welcoming" - think Staples for toys. Nothing is impossible but their survival was really only feasible with a "burn it all down and start over again" strategy, not just small tweaks to the legacy Toys R Us model.
    - gosub100 1y ago
      > I'm not sure why you're riding for the predatory PE firms, here. from my original post: "even though I agree with you that PE sucks." if you're missing basic points like that, no wonder you're confused.
sulam 1y ago
Or they could have been Barnes & Noble.
adfm 1y ago
PE is a crude tool for crude extraction. Honestly, the last time I found myself in a TRU, I had to leave because the off gassing was overwhelming. So no, not 1991, but likely something very 2025. If they still sell sugar water and cereal boxes at the grocery store, there's a market for TRU. pew pew.
- adfm 1y ago
  Here’s a video that breaks down the TRU PE mechanics: https://youtube.com/shorts/AuiHC_DuAAM?si=sogV_hJCOhYXHNwe https://youtube.com/shorts/AuiHC_DuAAM?si=sogV_hJCOhYXHNwe
greenavocado 1y ago
Kids know absolutely nothing when they are born but they generally have a strong instinct to play with certain kinds of toys regardless of their short life experience. There is not much reason to force innovation in this sector.
- listenallyall 1y ago
  It's not toys that need innovation but the Toys R Us business model. I loved going there as a kid too but it had been surpassed by WalMart in toy sales volume long before it went private. Target was probably close if not surpassed it, and video game sales were taken over by more convenient (and way more fun) GameStops. TOY stock had dropped a ton, and really was only hanging in there due to Babies R Us. All of this before Amazon was a serious retailer of anything besides books (meanwhile toysrus.com was a disaster that they took offline). It's a fun place to remember but I'm pretty sure if you walked into a replica Toys R Us from 1998 today you'd immediately be overwhelmed by suckiness - the horrible fluorescent lighting, zero customer service, lack of furnishings (Costco stores look nicer), nothing to actually try or play with, prices that weren't too competitive.
  - mst 1y ago
    It does kinda make sense to me that the various non-US subsidiaries that survived did so at least in part because those places didn't have anything like Walmart. Whether they'll be able to continue to survive in a world containing the current incarnation of Amazon is a different question and I've honestly no idea how that will turn out.
freeAgent 1y ago
Toys R Us also sold stuff like video games and collectible/trading cards…and bikes, etc., I think, at least when I was a kid. I’m sure their product mix would have continued to evolve, but if you do have children, you probably know that they still love physical toys like Hot Wheels, dolls/action figures, LEGO, etc. That will probably never change.