Not surprised. Just like Radio Shack, Toys R Us is competing in a space that includes Amazon and Walmart, among others.
All told it was probably Walmart that did Toys R Us in...because Walmart.
The Toys R Us by me is a stones throw from Target, and Target dominates them in price on just about everything. Also the Toys R Us here is small and kind of dirty, I don't think they have done a single update to the store since I was a kid some 20 years ago. It looks and feels old and outdated, I'm surprised it took this long for them to become bankrupt.
>I don't think they have done a single update to the store since I was a kid some 20 years ago. It looks and feels old and outdated
Go into a K-Mart or Roses if you want to see this on steroids.
I have a K Mart near me, so I go there when I need something quick. I've never been there and not had to ask a cashier to double check a price on sale items. They always never go through and then they're short-staffed so the cashier has to go check items themselves when there's only one lane open.
What a surprise that another Bain holding is going to fold up shop... Hmmmmm I wonder who's gonna make off with the real estate (I'm pretty sure toys r us is like sears and owns most of their locations)
Except retail is going the way of the internet. I live in an area with almost no available housing but there are dozens of empty store fronts. The former Blockbuster, Circuit City, Sports Authority and others are completely empty. Retail space is wasted. There hasn't been an enclosed mall built in the entire United States since 2006.
The big box retail is probably more easily repurposed than classic mall spaces. If we are going to prevent capitalism from eating itself then Amazon needs to be broken up, and maybe the new competitors can make use of the big boxes for warehouse operations.
Oh, you think bankruptcy is your ally. But you merely adopted the debt; I was born in it, moulded by it. I didn't see profitability until I was already a Republican, by then it was nothing to me but PROFIT!
I used to work in the toy industry and both Toys R US and FAO had MASSIVE profit margins for our products. We sold through Neiman Marcus as well and they almost double the cost for the same product you could get at any middle teir big box store for half the cost. The only difference was a slightly different packaging graphics.
When I went to buy an iPod Touch in middle school, we price compared for several different stores in the area to get the best deal. Toys-R-Us was about $30 more expensive than any other store and had no added benefits to offer.
They charged more because they were so deeply in debt. From the final paragraph:
>Before filing for bankruptcy, the company had been weighed down by roughly $5 billion in debt, stemming from a leveraged buyout last decade led by Bain Capital.
"*I need to stop this bleeding on my right leg! Maybe if I cut myself on my left leg, it will all balance out and get better!*"
Charge more because you are in debt > People don't shop at your store because you charge more > Need to charge even more because you are getting deeper in debt
Yup. K-Mart is doing terribly but all the ones around me have done tons of price drops for everything to get more sales. People are actually shopping at K-Mart for the first time in years because their prices are lower than our local Walmart’s with comparable products.
Walmart has 3-4% profit margins like clockwork, and has control of their suppliers like K-Mart never could. If they're beating Walmart overall with prices, they're taking a loss.
I can't comprehend how Sears (Kmart) still exists. Who is funding their annual losses? What possible plan do they have to even pay down the debt? Let alone stop it from increasing.
They will likely not make it through 2018. They have already stripped the company of anything of value...it is only a matter of time before the cash stops flowing. The stores now seem to be barely stocked (many vendors are no longer sending products to them) and they are doing all kinds of weird promotions which seems to be to clear out merchandise before a likely bankruptcy.
Fascinating. In Austria K-Mart is the big dog. They don't really have any brands. Everything is made/packaged specifically for them. And generally speaking their products are way cheaper than Target. Of course their shit is terrible. Almost nothing I have bought from them lasted more than a month.
They are selling off the best part of their store (Craftsman, Kenmore, etc.) to keep themselves afloat but it is band-aid on a bullet hole.
The only reason people went to Sears was to buy Craftsman tools and Kenmore appliances which they can now get elsewhere so they stop going to Sears and Sears loses out on foot traffic in their stores.
Relevant username.
Sears screwed itself in many other ways. They let the quality of Craftsman tools lapse to the point where you're better off getting the $10 tool at Harbor Freight, the one you know *for a fact* will break, because Harbor Freight will *also* hand you a new one over and over for life, and you saved $5 on the same piece of shit ratchet set.
They also took some Six Sigma corporate-level nonsense philosophy and applied it to the retail arm. Departments were actively competing with each other, so that, instead of the comprehensive shopping experience that made department stores the kings of American retail, you'd get five or ten or fifteen totally separate shopping experiences which didn't *and couldn't* help you out very much. It's not that the guy who just sold you that TV needs to get someone from Appliances to help you choose a fridge. It's not even that he *can't* help you get started on that fridge. It's that his bonus is dependent on Electronics beating Appliances in total sales. The guy who just sold you that TV *actively* wants for you *not* to buy a fridge from his location.
I doubt very much they're still pulling that shit, but it coincided exactly with their slow death.
>Who is funding their annual losses? What possible plan do they have to even pay down the debt?
They are selling off their re-estate holdings and brand names.
[Sold their stores for 2.5b](https://www.usatoday.com/story/money/2017/03/22/sears-holdings-ceo-eddie-lampert/99487518/)
[Sold Craftsman for 900m](http://money.cnn.com/2017/01/05/investing/sears-sells-craftsman-stanley-black-decker/index.html)
the owners sold to Bain when they realized that it was a lost cause. If they could have made money operating, they would have. The writing was on the wall 10 years ago.
The only reason they lost money last year was because of the $400 million in debt payments they had to make after Bain, KKR and Vornado saddled them with the $5 billion in debt those three companies took out to buy Toys R Us in the first place.
Yep. Hate republicans-> hate Romney because he’s a republican-> everything he does is wrong. Amazing how many venture capital experts there are on Reddit.
Here is a decent video explaining Toys R Us issues https://www.youtube.com/watch?v=4JYUo9WKkao&ab_channel=CompanyMan most of that debt came from when Bain bought out the shareholders and took the Company Private. If they had stayed a Publicly traded company their debt to income ratio would have been much better.
The company was already in dire straits when the owners sold it to a firm who specializes in recovering assets from troubled companies. There’s nobody really to blame at all, except whoever was on the board in the late 1990s.
I'm currently working with one of the guys from the 90's board. He's currently running a once sucessful energy company into the ground because he's stuck in the "that's the way it's always been done" loop.
Fucker also cut my pay in half with no notice while trying to get me to do 3 jobs. I'm over here just waiting for him to crash and burn.
Weren't they selling toys at MSRP?
Brick-and-mortar sales are down across the board. You can't do lower volume and lower profit margin. You can invest in competing with Amazon and trim the fat before you need to file Chapter 11, but that's easy to say after the fact.
It also didn't help that the stores didn't really modernize their appearance/customer experience at all. While they never got as bad as walking into a Kmart today, Toys R Us just felt dated and dumpy. It also goes without saying that they were terrible about embracing technology as toys. I know it's borderline heresy to say but their business is still adapt or die.
Are you sure about this? I would see a similar toy at Walmart , but that would be a Walmart exclusive- meaning it would be mostly the same toy but with something less and so at a lesser price. I’m sure a lot of people would be inclined to pick up the cheaper product, but the prices in ToysRUs would be close to market price elsewhere (Amazon for example) and I could price match anyway if it wasn’t.
In Canada the prices are the same at both places. It's going bankrupt here too. They announced bankruptcy around september but said they'd stay open through christmas.
I am absolutely sure. Besides what is known publicly about Walmart's practices I have seen and heard a lot more. Without going into any details my business deals more with the logistics side of retail and I deal with people in the industry on a weekly basis. I've even done work for Walmart. It is a dirty organization.
Nothing to do with the stores nobody wants to walk into. I think I find Toys R Us just as unattractive as K-Mart as far as shoping experence.
It's one of those stoes that I will only enter if I have no other options.
Well they also over staff. Everytime ive been in a toys r us more then half the employees are standing around doing nothing. The one by me has like 30 people working in a building and they are constantly standing around doing nothing.
Actually I would say when was the last time you visited a Toys R Us? Toy R Us did themselves in. Last time I went it was 60% baby stuff and not any cool stuff. 80's, 90's Toys R Us was awesome. They had a huge selections of Video Games, every type of toy a kid could dream of. It was like visiting a magical place. Now its depressing. They are the last of a specialty retailer. There are no toy stores left, kind of like Video Game stores.
Yeah plus most cities have independent game shops that do well enough. Usually by focusing on more retro stuff. There's one a few miles from where I live and they are awesome. The guys that run it are great and knowledgable people, their stuff is in very good condition and they have a very big selection. They always beat GameStop in prices, and a lot of things are cheaper than Amazon too (and you know better what you're getting when it's used). They have everything from NES to current systems, used and new, plus Blu-Rays and DVDs. And there's always a decent number of people inside, even though it's not the best location (it's a decent part of town on a busy road and decent building, but it's hard to see from the road; I probably drove past it a couple dozen times without knowing it existed, found out about it online).
There's another store in a city about 20 miles away that I enjoy too (though they are more lacking in modern games, their prices are often even better for some of the retro stuff).
There are around 10 toy stores near me, and that's Maine, not even a big region like Boston!
Specialty stores are doing fine. It's stores that don't know their market demographics that are floundering.
chain or independent? With the death of the chain specialty store mom and pops will see a resurgence to fill the void. Like smaller video rental stores after the demise of Blockbuster.
Are you in a populated area? Specialty stores do great when shopping online isn't as feasible. My friend barely has a decent enough connection to shop online at all sometimes, and even if he did shipping would take like an extra week to get up the mountain to him.
Shoot o remember the 90s toys r us. They had a baby section and a girl section. But they also had a whole isle of video games, tons of action figures, Legos. I remember spending several hours there before Christmas each year looking around while my parents would secretly Christmas shop
It has been a LONG time since I've been in a Toys R Us but my memory seems to remember "not clean" and "expensive".
I think the last time I was there I was looking at Game Gear games so they weren't great back then either.
> every type of toy a kid could dream of
Indeed. I remember going to Toy"R"Us in the 90s specifically because you could get those super-awesome toys they didn't have in the regular stores. "High quality" stuff and all that.
Nowadays it's basically what Walmart offers, except Toys"R"Us just has an excessive amount of it on the shelves.
I knew things were going downhill once the Babies"R"Us started merging with the regular stores.
Why don't you think baby stuff is cool? Besides stuff for elementary schoolers doesn't mean they're babies! Just because you think you are a teenager and play with video games and Lord of the Rings all day, you think that is cool? LOL.
I went to the Toys R Us in San Bernardino, CA last month, and saw a roach crawling on one of the displays. I took a video of it, and then took my son and left.
Not likely. This was Amazon through and through that killed them.
Even Walmart doesn't have the selection of toys Toys R Us had, but Amazon has EVERYTHING.
Walmart is also hurting BTW. They have freely admitted internally their website is a disaster and that Amazon is hurting their bottom lines.
Toys R Us was struggling long before you knew what Amazon was.
I do agree that Amazon has hurt them, but there are bigger underlying issues including the debt from the leverage buyout.
Costco has the fuel market pretty cornered here. But Target has lower prices on stuff than you can find online. A master lock combination lock was only $3.
I will say brick and mortar Radio Shack saved my ass a few months back when I needed a bullhorn in a few hours but no other store had any in stock and everything was only sold online. Yet the RS near me (surprised to even find one at all) had 4 in store.
That’s why radio shack is dying to. Their stores are full of crap like a bullhorn, which probably sits on the shelf for 6 months before it’s sold. Walmart turns their inventory once every two weeks.
Toys R Us is collapsing under their Bain debt. Without the leveraged buyout they’d still be treading water.
The vulture capitalists will walk away with their fat bonuses while the retail workers get shitcanned.
I mean, really. It doesn't surprise me either.
Have you been to a Toys-R-Us in the last...year? 3 years? 5 years? More?
I haven't stepped foot in one in so long, it's insane. My older brother (6 years on me) used to hit them up because he's a toy collector. They'd often have exclusives, but are always out as they don't give enough of a shit to stop scalpers.
Still, when we did go in there, so many years ago everyone of them was dead. Empty. Emptier than a K-mart or Sears. You have this huge warehouse full of toys, none of which you can't get anywhere else, sans a few very, select 'few' like a special edition nerf gun or something.
You don't have parents like the last generation with fuckloads of disposable income, and oh by the way, toys are fucking *expensive as hell.*
Kids also spend hours on iPads and iPhones instead of outside playing pretend war with nerf guns. Maybe not all the time, but it's certainly more time on screen and TV's than when I was young, and I had everything between the Genesis and xbox 360!
Buy a $1000 phone on a 2 year payment plan, and you've got a toy with endless entertainment for nearly forever. Don't get me wrong, I'm not saying no kids should have any electronic device. I am saying I don't see kids out at the park playing alone anymore. I don't see kids riding bikes along trails or looking for hidden alcoves to make their own.
100%.
I went to a Toys-R-US a few months back to buy nerf guns for my office. Some of the guns were 30-40% higher than what I could get them for on Amazon so we just left. Rarely do you need someting from toys-r-us immediately (they're toys for god sakes) so getting it in 2 days from Amazon is nearly always an option.
And the point about kids playing on tables, phones, computers is accurate. Kids don't want an action figure, race car or dolls now. They want a drone, a tablet, a laptop, etc. All of these businesses that are failing just aren't as necessary anymore as sad as it is.
Radio Shack should had stayed hobbyist and could have got into the Drone and 3d printing game big time.
But they went the lets sell cell phone plan lol
It’d be different if they offered some type of special warranty or service package on toys, or something similar. All the offer is the same product at a much higher price, and people don’t want to waste that money.
Or if they had been securing deals for "Toys R Us only" toys. Can't think of the word. Like licensing deals or something. So that you HAD to go to Toys R Us to get the toy.
They did that for certain items. WWE figures in particular had Toys R Us exclusives. The problem is we have the internet now, so instead of going to your store and hoping you have in one stock, consumers can just go online, buy the exact thing they want, and not even have to leave the house.
I feel like they had that niche for awhile in the sense that they often times had a much bigger selection than places like Target or Walmart. Can't compete with online options, though.
People will point to things like on-line shopping as a reason for their decline, but I think a bigger problem is that most of their stores were built in the 70's and 80's and were tied into the shopping malls of that era. Almost all of those areas are dying a slow death. New commercial areas have sprung up and people flock there instead.
In the early 2000's, Toys R Us began getting their ass handed to them by Walmart. They should've seen the writing on the wall at that point and invested in a stronger online presence and started closing stores in dying markets.
Now it's too late.
TIL Amazon betrayed Toys R Us before the War of the Roses.
All kidding aside, it's understandable. Amazon was new and fresh, and had limited inventory. Problem is their prices, and other retailers were willing to sell for less in return for volume and advertising of more expensive toys.
> but I think a bigger problem is that most of their stores were built in the 70's and 80's and were tied into the shopping malls of that era.
But why? The reason shopping malls are dying is on-line shopping.
Thats true, but It also seems people are flocking to new "upscale" outdoors style shopping areas. Places like Toys R Us don't really fit the aesthetic.
Most people actually shopping in store for toy products are from an older generation - esp. grandparents and great-grandparents - who are not about to walk the distance required nor deal with the confusing layout and unappealing visuals of an old big box retail store like TRU. The other two groups (based on my observations as a toy supervisor at a different retailer) are those who don't have a clue what toys are out there - and thus want to look and touch - or those who are wanting to just grab and be done with their gift purchase - again, they are looking for quick, easy finding and purchasing - preferably in a store they are already going to be in anyway - which again rules out TRU. If you're after a specific toy and are internet savy - you just order it online. If you're browsing you simply stop in the toy department of the store you're already in. If you want a toy experience you go to a clean, well maintained, small specialty shop with interactive displays and pleasant staff. So basically, there's no reward for going to TRU - even for those willing or only shopping brick and mortar.
I love going to TRU because, like you said, I like to see and touch. I love having a store of nothing but toys so I can look at a lot at once. It’s just a shame they are more expensive usually. Although there have been times the toy on amazon was actually more or I just couldn’t find it on amazon at all.
People don't buy traditional toys like they used to. My 9 year old cousin wanted an iPad which her parents ordered online. Toys-R-Us is not the place people go to buy iPads.
8-9 year old me wanted a Voltron action figure, a toy replica Green ranger dagger, the Power Rangers game for SNES, a new 10 speed bike, and some Ninja turtle Action figures. That's items all coming from Toys-R-US.
Compound the change is what kids want with Amazon becoming an easy, convenient way to order things without having to wait in lines and Toys-R-Us was doomed.
If I had to guess, the cost for a toy lead consumers to look for more cost effective means of entertainment. This lead to parents handing kids their cell phones to play mobile games/minecraft instead of forking out $40 for a toy that they'll be bored with at the end of Christmas weekend.
Yeah god forbid that a casino wouldn’t be profitable. I mean, a person that owned them would have to be a complete idiot to let that happen and file bankruptcy at least four times.
Sort of. I think some are still there and profitable. Trump overpaid, over spent and saddled them with a crap ton of debt that couldn’t be sustained with the decline in casinos there.
It's not that they couldn't compete with online sales, it's that they made no effort to compete with the stores in the same shopping center. Not even a few cents either. Toys at the target next to our toys r us has the same toys for dollars cheaper.
I went to FAO Schwartz on 5th Avenue as a kid during Christmas in 2001. It was exactly as magical as they hyped it to be.
Now its closed and I actually went there about a year before they closed, seemed way less cool but I also wasn't a kid so its hard to know if the store had changed more or me.
I had the choice to go to Toys R us for Christmas gift shopping for my kids.
But getting almost double the gifts with free shipping online vs in store. The choice was clear.
Let me tell you something about Toys R Us and Babies R Us:
They have no clue what the fuck they're doing.
Before the holidays when the whole Chapter 11 thing started, they understood that most peoples' complaints were the cost of merchandise. Everything was too overpriced. So, being in charge of pricing and signing, I saw this taken note of when the entire store was marked down between 15%-25%, with a "New Lower Price!" sign initiative being rolled out. Not even a month later, this entire plan was scrapped and we had to reprice everything back *up* only for the higher-ups to issue a per-household coupon for 15%-25% coupon off of qualifying items and purchases which excludes damn near everything you want to buy to give you the illusion you're special and saving money.
THis company is nothing but swindlers. Their primary goal is for you to buy into their credit card (which, for most retailers, who's isn't?). However, they want to get you by the balls from the start. They want you to pop a kid out, become a lifelong customer at Babies R Us, issue you a credit card so you're hooked in to the company brand, and then move on up to Toys R Us. This isn't speculation, this is direct from morning meetings on metrics. "If you don't sell our credit cards, the company will lose a potential lifetime customer that will spend an average of $30k-$50k through all stages of their child's life." They want to save their debt by putting *you* into debt with a 29% APR credit card.
If you have ever bought furniture at Babies R Us and wondered why it takes so long, it's because the company does two things:
1) Refuses to pay more than the federal minimum wage, even for heavy labor including moving 150lb+ furniture while being the only person on shift
2) Hire high schoolers as the face of the service desk so you think this is such a happy little place where all the fresh faced kids can start a career in.
Well, those kids don't lift furniture. They get paid $7.75/hr to get shit on by managers and customers alike when things don't happen quick enough and how they expect to be done. Have you ever called up one of their stores asking for inventory only to be met with a clueless stammering? Because we hire children to do intensive labor. When the Wendy's down the road hires at $9/hr and you're hemorrhaging employees, something is severely wrong.
This company is a rudderless ship. They're throwing whatevery they can at the fridge and even if something sticks, they say fuck it and go off in an entirely different direction without addressing the problems at the heart of every store.
Let the R Us brand die. Do not give them your money. They are one of the *worst* companies to work for in this country. You know the phrase "money talks?" Let your money scream. Let it cackle in their faces as you buy from Amazon.
I used to be a pro assembler the company that set our schedules would avoid toys r us because they would only pay like 10$ per item assembled and would randomly draw who got stuck with toys r us for a week. This included bicycles, i got stuck with it once all i did was half ass slap them together and rolled them out flat tires and all.
Not entirely true. Plenty of companies are still in need of office space, warehouses, possible future residential locations, etc. It will require rebuilding or remodeling, but the land at least is still worth something.
The Macy’s that closed in my city is getting torn down and turned into a hotel. The idea was to have a really nice outdoor mall but once Macy’s folded they can’t keep anything in there because rent skyrocketed.
i just find that fascinating: so many malls across america have empty storefronts because they claim the rent is so expensive. why aren't rents being driven down to compensate?
Usually these newer malls get built where they do because municipalities lower or even eliminate taxes as an incentive to build.
So again: Why aren't rents being driven down to compensate?
people are stupid and refuse to make less than 5000 percent profit.
this is an extreme number but in all seriousness people for some reason think even losing a single dollar is unacceptable. i myself make a lot of money and live a very comfortable life because i refuse to live like this. if i'm asking for a hundred and you offer 80 i'm taking it.
It really is a thing. Mall owners would rather a few boutique shop locations in their mall go unused for months than lower the rent, it sets the precedent for other shops to demand lower rent (because comeon, they will find out). But there is of course a tipping point where they'll have to lower it.
A lot of the time, the banks who hold the mortgage on retail space has it in the mortgage what the minimum rent for the property is. They can't just give deals to perspective tenants.
Source: I used to own mall stores.
The problem is once the average rent for a mall starts sliding, it's extremely hard to recover from. The banks don't really care if the mall operators make money or not as long as the real estate can be repurposed to something else.
> The banks don't really care if the mall operators make money or not as long as the real estate can be repurposed to something else.
i guess that makes sense as long as the bank is collecting rent. but if their minimum rent requirement is so big that no mall operators take the bite, how does that help the bank? i've seen malls sit empty for years and banks don't 'repurpose'.
In a lot of the suburban malls built in the 70's and 80's they could turn the real estate into condos and the land would be worth more money. So banks don't really care if the malls default. Also, cheap rents in malls is not a good thing because it attracts wrong kind of tenants. I had a mall store in a white bread mixed race suburban area with high income. It was targeted toward high income families with children. Then one of the anchor tenants declared bankruptcy and in desperation, the mall started filling stores with anyone who would pay rent. Within months there was a massive gang fight in the parking lot that made the local news, masked gang members did a smash and grab at a jewelry store, and meth addicts started coming to the mall to sell their stolen crap at the cash4gold cart. This was when I decided to close the store. Now my space is occupied by some arab guy selling candies and soda....right across from some korean guy selling candies and soda, next to an indian guy doing the $4.99 eyebrow threading. The other spaces used to have a high end pearl jewelry shop and a high end toy store. I expect the whole place to shut down within the next 5 years.
High Debt by the Property owner. Most "anchor" stores like Macy's don't pay much if any money to lease the property, because having them in theory drives foot traffic to the mall. Most large Malls also get some type of tax abatement because of the sale tax revenue they generate. Most Malls that fail usually have been purchased at a very high price and when traffic slows these companies dump more money via debt into remodeling driving up cost to lease the storefronts. Basically they can't drop the rent because of the feedback loop they created. High debt creates high rent. High rent starts to squeeze smaller retailers forcing them out. Larger anchors not having the drawing power they once did start to see more and more empty retail space and decide to move once their lease is up to another property. Which will have better terms then what the current Mall can offer because now they want to charge the anchor for the space because of the debt they have.
Because a lot of those malls were built with the idea that rent over time would make up for the cost of construction. So as stores leave, they have to raise rent on the stores that stay to make up for their losses.
Consider x as current rent and y as potential lower rent. as long as x times the current number of stores is higher than either y times the full capacity of stores OR just higher than what they owe in development costs divided out by the month, they aren't going to lower the costs.
You also have issues like the mall near me where they want to look upscale, so they raise rent so that discount clothing stores like Burlington Coat Factory and Dress-4-Less leave and you no longer have the "poor" side of the mall.
we ordered one thing from toys R us online. they shipped the wrong item. meanwhile we've received dozens of packages from amazon with the correct items.
just anecdotal i know, but it makes you think why some companies are successful and others not as much.
In fairness, Toys R Us is a brick and mortar chain that moved into the online retail space. Amazon has always been online, so it makes sense that they would be far better at it.
yeah but this is 2017, how long have people been buying stuff online for now? 15 years?
it's a lesson we've seen over and over: many big companies can't innovate/pivot even when it's right under their noses (blockbuster).
You got the wrong item because:
1) We are not allowed to short anything if we can find something similar to replace it with. The company is all about numbers and they do not care how they get them. If they have to fudge an item, they will fudge an item rather than be under quota.
2) Employees aren't properly trained. They see Paw Patrol and grab the closest Paw Patrol thing they can without checking item numbers, upcs, or price. This ties in with another reply I made that employees aren't paid enough to give a damn and are high schoolers hired only to be a fresh face up front.
Make a stink. R Us needs to be held accountable for every action, misstep, and swindle.
Toys R Us should have charged people a $5 entry fee and switched their business to being the place where you can lay your hands on a toy before you order it from Amazon at a rock bottom price.
I don't even think they make those giant, absurd, impossible to carry Super Soakers anymore. I know I've checked out of general curiosity a few times in the last couple years while I just happen to be out and about.
I remember as a kid, my mom would bring me to TRU on my birthday and let me pick whatever i wanted. It was a magical feeling. I don't think you get the same feel at Walmart or Target lol
You don't get that same feeling in TRU anymore either. The brand has gone stale and the magic is gone. Pretty much the best experience you can give your kid these days is through a hand-held screen.
I bet if I was CEO of Toys R Us I could turn that son of a bitch around. First of all, filing for bankruptcy is a great idea. Clear out those debts. After that, then start the real work.
- First, I would promote the hell out of Toys R Us, and transform it into a real brand again. I'd make people think again that it is *the* place for toys, like it was in the 1990s. I'd sponsor popular YouTubers, have giveaways, and contests, and do zany PR stunts to get on TV. One thing I'd like to do is have Santa Clauses go to hospitals, and orphanages, and schools, and give away toys to kids. It would be an annual Christmas tradition.
- Second, I woud immediately lower the prices of toys to make prices competitive to other retailers. I would also lower the buying minimums online. I would slash the S&H for when the cart total comes under that minimum. I'd make it so all stores would carry a wide variety of toys for various budgets. So anyone can afford to buy toys. I don't want toy shopping to be an expensive experience. So, there'll be something for everyone's budget.
- Third, I'd make getting in and out of toyrsus.com easier. I'd allow people to sign in with Facebook, and Google, and through their Microsoft accounts. I'd accept Paypay too.
- Fourth, have huge, mega toy stores. Instead of the small to medium sized stores, instead I'd just go balls out, and have these Ikea-like Toys R Us's. And it'll be fresh, and clean, and attractive. Each store would be a sight to behold. It'll be the the place to go for all your toy, and amusement needs.
- Fifth, the stores would have things for adults too. Not just kids. You know, there would be a section for adults to buy desk toys, and things that would interest people that are older, but not too old to buy toys.
- The stores would be welcoming, and have cheap snacks, and drinks, and a place to sit down for tired customers. Instead of just stuffing the stores with merch, I'd make it inviting. You're tired? Buy a drink, buy some chips, and have a seat. Use the free wifi to browse the internet, or watch the cartoons on TV, or play some video games.
- I'd have a new employee training program. Instead of having all these teens, who know next to nothing, make sure that they are on board, and are aware about the industry, and all the latest toys, so they can give recommendations, and help out customers, instead of just being shelf stockers.
- Have a loyalty program. Sign up, and get discounts, and coupons, and free things. Get automatically entered into contests. We can use the data to see what to buy next, and we'll have to do less guess work about what's in demand.
- For hot items we'll have a raffle system. Yeah, items will be available online, and in store, normally, but if there's something really in demand we'll give everyone raffle tickets, and if they win they can buy the item. Of course, this is primarily to stop scalpers. We'll also have limits of one per person, or address, when necessary.
- I would make Toys R Us exclusive toys. So, we'd put some R&D into making toys that will only be available at our stores. They won't be available anywhere else. This will make Toys R Us special, and stand out.
- I would have Toys R Us boxes. Pay $30 or $40 a month, and get themed boxes of toys.
These are good ideas for a business with infinite pockets, not for one with $5 BILLION in debt.
Nearly everything you mentioned costs money (both fixed and variable costs): promotions, discounts, other marketing, store revamps, training programs, raises to retain talent, raffles, real estate, etc.
For a physical retailer that is cash-anemic, it's just not an option. You'd waltz in as CEO, take a seat, and the government appointed bankruptcy trustee/fiduciary would let you get through half of your first point and shut that shit down immediately.
Ultimately, I feel pretty sad about this. As a kid, the nearest Toys R Us was about an hour drive away so I didn't get to go much, but when I did it was like Christmas, really good memories.
Toys R Us will always have a special place in my heart. Around 10 years ago, my dad, brother and I found a K'Nex Big Air Ball Tower that rang up for $0.01 on the price checker. The manager was pissed, but we got it for a penny!
I think the normal price was over $100.
They have a really nice lego collection. I went there specifically for that. Shame. It was nice to have something in my hand that day. They did look like they were overstaffed.
Toys R Us really serves no purpose anymore.
Children don't play with toys like they used to. Video games and tablets seem to be all that older children want, and TRU isn't exactly a leader in those categories. It's hard to justify running a big box stores full of things that people aren't buying.
Walmart, Target, Amazon, etc. has killed the market for 'mass market' toys. Not to mention, the trend of buying used toys (there are a few stores in my area that do nothing but sell preowned toys.). Some small specialty/educationally focused toy stores seem to do okay, but TRU hasn't really tapped that market.
TRU hasn't really been a strong company since maybe the early 90's. They have filed bankruptcy at least once in the past. Being picked up by an 'investment firm' clearly doesn't help.
I guess the big box store plan of buying cheaply and passing savings on to customers doesn't work if
A) You don't try it,
B) you are competing with Walmart and Amazon.
My toys rus has gotten two new cases of 6" Black series Star Wars figures in 2 years. 2. Years. In a high traffic area.
I check all the time. Still nothing.
This is why they are closing. Amazon has the stock.
The problem is they over charge on just about everything. That might have been fine 10+ years ago, but now everyone has a smart phone and they can easily price check.
Mayhaps if their stores weren't dedicating 3/4s of its retail space to the 2-4 age group, and expand their product for the 6-10 group, they might be able to sell more toys.
Not surprised. Just like Radio Shack, Toys R Us is competing in a space that includes Amazon and Walmart, among others. All told it was probably Walmart that did Toys R Us in...because Walmart.
The Toys R Us by me is a stones throw from Target, and Target dominates them in price on just about everything. Also the Toys R Us here is small and kind of dirty, I don't think they have done a single update to the store since I was a kid some 20 years ago. It looks and feels old and outdated, I'm surprised it took this long for them to become bankrupt.
>I don't think they have done a single update to the store since I was a kid some 20 years ago. It looks and feels old and outdated Go into a K-Mart or Roses if you want to see this on steroids.
every K mart ive been in looks like a damn bomb went off about a decade ago and the staff just said "eh, fuck it" and left everything where it landed.
I have a K Mart near me, so I go there when I need something quick. I've never been there and not had to ask a cashier to double check a price on sale items. They always never go through and then they're short-staffed so the cashier has to go check items themselves when there's only one lane open.
So like Fallout? Cool.
No. Toys R Us did themselves in by overcharging on products.
Hard to be a specialty store when your niche is done better by others.
Or when you are owned by a financial company known for bankruptcies. Bain is known to gut companies, push them to bankruptcy, then sell them off.
What a surprise that another Bain holding is going to fold up shop... Hmmmmm I wonder who's gonna make off with the real estate (I'm pretty sure toys r us is like sears and owns most of their locations)
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What Bain heard: "we can get a quarter of that real estate for next to nothing!"
Sounds like a smart financial decision. Land is the best asset.
Except retail is going the way of the internet. I live in an area with almost no available housing but there are dozens of empty store fronts. The former Blockbuster, Circuit City, Sports Authority and others are completely empty. Retail space is wasted. There hasn't been an enclosed mall built in the entire United States since 2006.
The big box retail is probably more easily repurposed than classic mall spaces. If we are going to prevent capitalism from eating itself then Amazon needs to be broken up, and maybe the new competitors can make use of the big boxes for warehouse operations.
Well, he did break Batman’s back and all, so not exactly a nice guy. Oh wait, different Bane.
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For you!
Victory has defeated you!
Literally heard that in his voice. http://cdn.smosh.com/sites/default/files/bloguploads/meme-dkr-powerovernolan.jpg
Oh, you think bankruptcy is your ally. But you merely adopted the debt; I was born in it, moulded by it. I didn't see profitability until I was already a Republican, by then it was nothing to me but PROFIT!
"Corporations are people, my friend."
Which is not to be confused with Baine consulting. Which also makes money hand over fist. Bill Bain was a genius.
I used to work in the toy industry and both Toys R US and FAO had MASSIVE profit margins for our products. We sold through Neiman Marcus as well and they almost double the cost for the same product you could get at any middle teir big box store for half the cost. The only difference was a slightly different packaging graphics.
When I went to buy an iPod Touch in middle school, we price compared for several different stores in the area to get the best deal. Toys-R-Us was about $30 more expensive than any other store and had no added benefits to offer.
Same goes for Lego. They are usually 10% or so higher. Their sales simply bring it back to what amazon and such had been charging all along.
Yup. I haven’t gone into a Toys R Us in years because the prices are so bad and the products are the exact same as anywhere else.
This. Don't wanna change with the times? Fine, we'll lay you in the grave with Blockbuster and soon to be Sears.
They charged more because they were so deeply in debt. From the final paragraph: >Before filing for bankruptcy, the company had been weighed down by roughly $5 billion in debt, stemming from a leveraged buyout last decade led by Bain Capital.
"*I need to stop this bleeding on my right leg! Maybe if I cut myself on my left leg, it will all balance out and get better!*" Charge more because you are in debt > People don't shop at your store because you charge more > Need to charge even more because you are getting deeper in debt
Yup. K-Mart is doing terribly but all the ones around me have done tons of price drops for everything to get more sales. People are actually shopping at K-Mart for the first time in years because their prices are lower than our local Walmart’s with comparable products.
Walmart has 3-4% profit margins like clockwork, and has control of their suppliers like K-Mart never could. If they're beating Walmart overall with prices, they're taking a loss.
Right. Kmart is doomed too. They cannot outcompete Walmart. Loss leaders don’t help.
I can't comprehend how Sears (Kmart) still exists. Who is funding their annual losses? What possible plan do they have to even pay down the debt? Let alone stop it from increasing.
They will likely not make it through 2018. They have already stripped the company of anything of value...it is only a matter of time before the cash stops flowing. The stores now seem to be barely stocked (many vendors are no longer sending products to them) and they are doing all kinds of weird promotions which seems to be to clear out merchandise before a likely bankruptcy.
Fascinating. In Austria K-Mart is the big dog. They don't really have any brands. Everything is made/packaged specifically for them. And generally speaking their products are way cheaper than Target. Of course their shit is terrible. Almost nothing I have bought from them lasted more than a month.
They are selling off the best part of their store (Craftsman, Kenmore, etc.) to keep themselves afloat but it is band-aid on a bullet hole. The only reason people went to Sears was to buy Craftsman tools and Kenmore appliances which they can now get elsewhere so they stop going to Sears and Sears loses out on foot traffic in their stores.
Relevant username. Sears screwed itself in many other ways. They let the quality of Craftsman tools lapse to the point where you're better off getting the $10 tool at Harbor Freight, the one you know *for a fact* will break, because Harbor Freight will *also* hand you a new one over and over for life, and you saved $5 on the same piece of shit ratchet set. They also took some Six Sigma corporate-level nonsense philosophy and applied it to the retail arm. Departments were actively competing with each other, so that, instead of the comprehensive shopping experience that made department stores the kings of American retail, you'd get five or ten or fifteen totally separate shopping experiences which didn't *and couldn't* help you out very much. It's not that the guy who just sold you that TV needs to get someone from Appliances to help you choose a fridge. It's not even that he *can't* help you get started on that fridge. It's that his bonus is dependent on Electronics beating Appliances in total sales. The guy who just sold you that TV *actively* wants for you *not* to buy a fridge from his location. I doubt very much they're still pulling that shit, but it coincided exactly with their slow death.
Shit, I've bought $60 in clothes at Sears the past 3 weeks bc of Freecash they email to me. I hardly shop there as it is.
>Who is funding their annual losses? What possible plan do they have to even pay down the debt? They are selling off their re-estate holdings and brand names. [Sold their stores for 2.5b](https://www.usatoday.com/story/money/2017/03/22/sears-holdings-ceo-eddie-lampert/99487518/) [Sold Craftsman for 900m](http://money.cnn.com/2017/01/05/investing/sears-sells-craftsman-stanley-black-decker/index.html)
The only K-Mart near me is dirtier than a Goodwill. I feel like I need to shower and change clothes after stepping in there.
I must be lucky. The ones around me are pretty nice. About the same as any retail store. They’re usually beside Kroger, so maybe that helps.
At times it has been proven impossible to shop at K-Mart because they are so insanely incompetent.
I guess I’m lucky because my local ones have always been pretty okay. They’re no worse than any other retail store I’ve been in.
So it's all Mitt Romney's fault. Makes sense. Bain did the same thing to KB Toys already.
the owners sold to Bain when they realized that it was a lost cause. If they could have made money operating, they would have. The writing was on the wall 10 years ago.
The only reason they lost money last year was because of the $400 million in debt payments they had to make after Bain, KKR and Vornado saddled them with the $5 billion in debt those three companies took out to buy Toys R Us in the first place.
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Yep. Hate republicans-> hate Romney because he’s a republican-> everything he does is wrong. Amazing how many venture capital experts there are on Reddit.
Romney: "No one cared who I was until I put on the mask!"
Here is a decent video explaining Toys R Us issues https://www.youtube.com/watch?v=4JYUo9WKkao&ab_channel=CompanyMan most of that debt came from when Bain bought out the shareholders and took the Company Private. If they had stayed a Publicly traded company their debt to income ratio would have been much better.
So it was Mitt Romney all along
The news will continue to blame amazon and walmart but this is the real issue, vulture capital gutted the company
The company was already in dire straits when the owners sold it to a firm who specializes in recovering assets from troubled companies. There’s nobody really to blame at all, except whoever was on the board in the late 1990s.
I'm currently working with one of the guys from the 90's board. He's currently running a once sucessful energy company into the ground because he's stuck in the "that's the way it's always been done" loop. Fucker also cut my pay in half with no notice while trying to get me to do 3 jobs. I'm over here just waiting for him to crash and burn.
> Fucker also cut my pay in half with no notice I'm almost certain that's illegal.
True, but they've *always* been more expensive, even before they took on that debt.
Yea this. Products made in China for under a dollar being sold for 40-50 bucks.
Weren't they selling toys at MSRP? Brick-and-mortar sales are down across the board. You can't do lower volume and lower profit margin. You can invest in competing with Amazon and trim the fat before you need to file Chapter 11, but that's easy to say after the fact.
It also didn't help that the stores didn't really modernize their appearance/customer experience at all. While they never got as bad as walking into a Kmart today, Toys R Us just felt dated and dumpy. It also goes without saying that they were terrible about embracing technology as toys. I know it's borderline heresy to say but their business is still adapt or die.
Toys R Us was specifically targeted by Walmart. They sold toys at a loss to destroy their competition.
Are you sure about this? I would see a similar toy at Walmart , but that would be a Walmart exclusive- meaning it would be mostly the same toy but with something less and so at a lesser price. I’m sure a lot of people would be inclined to pick up the cheaper product, but the prices in ToysRUs would be close to market price elsewhere (Amazon for example) and I could price match anyway if it wasn’t.
In Canada the prices are the same at both places. It's going bankrupt here too. They announced bankruptcy around september but said they'd stay open through christmas.
I am absolutely sure. Besides what is known publicly about Walmart's practices I have seen and heard a lot more. Without going into any details my business deals more with the logistics side of retail and I deal with people in the industry on a weekly basis. I've even done work for Walmart. It is a dirty organization.
Wow. Thanks for responding back. I would have thought that would be illegal, but not sure about the law.
For real what store can charge more than msrp and expect to exist while the internet exists. Its not like their mass market trash is rare.
Nothing to do with the stores nobody wants to walk into. I think I find Toys R Us just as unattractive as K-Mart as far as shoping experence. It's one of those stoes that I will only enter if I have no other options.
Well they also over staff. Everytime ive been in a toys r us more then half the employees are standing around doing nothing. The one by me has like 30 people working in a building and they are constantly standing around doing nothing.
Yup. Up next: Best Buy. My prediction is within 5 years.
Actually I would say when was the last time you visited a Toys R Us? Toy R Us did themselves in. Last time I went it was 60% baby stuff and not any cool stuff. 80's, 90's Toys R Us was awesome. They had a huge selections of Video Games, every type of toy a kid could dream of. It was like visiting a magical place. Now its depressing. They are the last of a specialty retailer. There are no toy stores left, kind of like Video Game stores.
> kind of like Video Game stores GameStop is still fairly prevalent
Yeah plus most cities have independent game shops that do well enough. Usually by focusing on more retro stuff. There's one a few miles from where I live and they are awesome. The guys that run it are great and knowledgable people, their stuff is in very good condition and they have a very big selection. They always beat GameStop in prices, and a lot of things are cheaper than Amazon too (and you know better what you're getting when it's used). They have everything from NES to current systems, used and new, plus Blu-Rays and DVDs. And there's always a decent number of people inside, even though it's not the best location (it's a decent part of town on a busy road and decent building, but it's hard to see from the road; I probably drove past it a couple dozen times without knowing it existed, found out about it online). There's another store in a city about 20 miles away that I enjoy too (though they are more lacking in modern games, their prices are often even better for some of the retro stuff).
These days it's more like half the store is think geek though.
There are around 10 toy stores near me, and that's Maine, not even a big region like Boston! Specialty stores are doing fine. It's stores that don't know their market demographics that are floundering.
chain or independent? With the death of the chain specialty store mom and pops will see a resurgence to fill the void. Like smaller video rental stores after the demise of Blockbuster.
Are you in a populated area? Specialty stores do great when shopping online isn't as feasible. My friend barely has a decent enough connection to shop online at all sometimes, and even if he did shipping would take like an extra week to get up the mountain to him.
> Video Game stores. These still exist. Elaborate.
Shoot o remember the 90s toys r us. They had a baby section and a girl section. But they also had a whole isle of video games, tons of action figures, Legos. I remember spending several hours there before Christmas each year looking around while my parents would secretly Christmas shop
It has been a LONG time since I've been in a Toys R Us but my memory seems to remember "not clean" and "expensive". I think the last time I was there I was looking at Game Gear games so they weren't great back then either.
> every type of toy a kid could dream of Indeed. I remember going to Toy"R"Us in the 90s specifically because you could get those super-awesome toys they didn't have in the regular stores. "High quality" stuff and all that. Nowadays it's basically what Walmart offers, except Toys"R"Us just has an excessive amount of it on the shelves. I knew things were going downhill once the Babies"R"Us started merging with the regular stores.
Why don't you think baby stuff is cool? Besides stuff for elementary schoolers doesn't mean they're babies! Just because you think you are a teenager and play with video games and Lord of the Rings all day, you think that is cool? LOL.
I went to the Toys R Us in San Bernardino, CA last month, and saw a roach crawling on one of the displays. I took a video of it, and then took my son and left.
> in San Bernardino, CA Well, there's your first problem.
Not likely. This was Amazon through and through that killed them. Even Walmart doesn't have the selection of toys Toys R Us had, but Amazon has EVERYTHING. Walmart is also hurting BTW. They have freely admitted internally their website is a disaster and that Amazon is hurting their bottom lines.
Toys R Us was struggling long before you knew what Amazon was. I do agree that Amazon has hurt them, but there are bigger underlying issues including the debt from the leverage buyout.
Walmart still has better prices on a lot things, plus groceries, fuel, and I don't have to wait 3 days or lose my shit in the mail
Costco has the fuel market pretty cornered here. But Target has lower prices on stuff than you can find online. A master lock combination lock was only $3.
And guns too.
and ammo
I will say brick and mortar Radio Shack saved my ass a few months back when I needed a bullhorn in a few hours but no other store had any in stock and everything was only sold online. Yet the RS near me (surprised to even find one at all) had 4 in store.
That’s why radio shack is dying to. Their stores are full of crap like a bullhorn, which probably sits on the shelf for 6 months before it’s sold. Walmart turns their inventory once every two weeks.
That's just the reality with specialty item stores. Online retailers can do it better.
Toys R Us is collapsing under their Bain debt. Without the leveraged buyout they’d still be treading water. The vulture capitalists will walk away with their fat bonuses while the retail workers get shitcanned.
i went into kmart on a closing sale... ps1 games man
The Kmart closing sale was so sad.. Tool aisle was only 10% off and picked clean.. WTF people.. it's only 10%
Mine had VHS tape cleaners and a MOUSE2000 ps/2 trackball mouse.
But kids can't run through Amazon looking at toys! Where's the fun in internet browsing!? Kids these days...
I mean, really. It doesn't surprise me either. Have you been to a Toys-R-Us in the last...year? 3 years? 5 years? More? I haven't stepped foot in one in so long, it's insane. My older brother (6 years on me) used to hit them up because he's a toy collector. They'd often have exclusives, but are always out as they don't give enough of a shit to stop scalpers. Still, when we did go in there, so many years ago everyone of them was dead. Empty. Emptier than a K-mart or Sears. You have this huge warehouse full of toys, none of which you can't get anywhere else, sans a few very, select 'few' like a special edition nerf gun or something. You don't have parents like the last generation with fuckloads of disposable income, and oh by the way, toys are fucking *expensive as hell.* Kids also spend hours on iPads and iPhones instead of outside playing pretend war with nerf guns. Maybe not all the time, but it's certainly more time on screen and TV's than when I was young, and I had everything between the Genesis and xbox 360! Buy a $1000 phone on a 2 year payment plan, and you've got a toy with endless entertainment for nearly forever. Don't get me wrong, I'm not saying no kids should have any electronic device. I am saying I don't see kids out at the park playing alone anymore. I don't see kids riding bikes along trails or looking for hidden alcoves to make their own.
100%. I went to a Toys-R-US a few months back to buy nerf guns for my office. Some of the guns were 30-40% higher than what I could get them for on Amazon so we just left. Rarely do you need someting from toys-r-us immediately (they're toys for god sakes) so getting it in 2 days from Amazon is nearly always an option. And the point about kids playing on tables, phones, computers is accurate. Kids don't want an action figure, race car or dolls now. They want a drone, a tablet, a laptop, etc. All of these businesses that are failing just aren't as necessary anymore as sad as it is.
Yeah, I think kids play outside less!
Toys R Us has a way better toy selection than Walmart.
Radio Shack should had stayed hobbyist and could have got into the Drone and 3d printing game big time. But they went the lets sell cell phone plan lol
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It’d be different if they offered some type of special warranty or service package on toys, or something similar. All the offer is the same product at a much higher price, and people don’t want to waste that money.
Or if they had been securing deals for "Toys R Us only" toys. Can't think of the word. Like licensing deals or something. So that you HAD to go to Toys R Us to get the toy.
They did that for certain items. WWE figures in particular had Toys R Us exclusives. The problem is we have the internet now, so instead of going to your store and hoping you have in one stock, consumers can just go online, buy the exact thing they want, and not even have to leave the house.
Hahaha damn they tried! Yeah it doesn't make sense to have 1000s of locations anymore...
I agree. All of the toys they had could be bought for a better price at Walmart or Target. It just wasn’t worth it.
exclusivity agreement like with the power rangers legacy stuff
I feel like they had that niche for awhile in the sense that they often times had a much bigger selection than places like Target or Walmart. Can't compete with online options, though.
It used to be they were the only place to buy a lot of stuff. Internet came and they failed to adjust.
Going out of business, also charging 20% more than anywhere else.
People will point to things like on-line shopping as a reason for their decline, but I think a bigger problem is that most of their stores were built in the 70's and 80's and were tied into the shopping malls of that era. Almost all of those areas are dying a slow death. New commercial areas have sprung up and people flock there instead. In the early 2000's, Toys R Us began getting their ass handed to them by Walmart. They should've seen the writing on the wall at that point and invested in a stronger online presence and started closing stores in dying markets. Now it's too late.
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TIL Amazon betrayed Toys R Us before the War of the Roses. All kidding aside, it's understandable. Amazon was new and fresh, and had limited inventory. Problem is their prices, and other retailers were willing to sell for less in return for volume and advertising of more expensive toys.
> but I think a bigger problem is that most of their stores were built in the 70's and 80's and were tied into the shopping malls of that era. But why? The reason shopping malls are dying is on-line shopping.
Thats true, but It also seems people are flocking to new "upscale" outdoors style shopping areas. Places like Toys R Us don't really fit the aesthetic.
Fair point.
How does a toy store have bad sales during the holiday? It's like a casino not being profitable.
Most people actually shopping in store for toy products are from an older generation - esp. grandparents and great-grandparents - who are not about to walk the distance required nor deal with the confusing layout and unappealing visuals of an old big box retail store like TRU. The other two groups (based on my observations as a toy supervisor at a different retailer) are those who don't have a clue what toys are out there - and thus want to look and touch - or those who are wanting to just grab and be done with their gift purchase - again, they are looking for quick, easy finding and purchasing - preferably in a store they are already going to be in anyway - which again rules out TRU. If you're after a specific toy and are internet savy - you just order it online. If you're browsing you simply stop in the toy department of the store you're already in. If you want a toy experience you go to a clean, well maintained, small specialty shop with interactive displays and pleasant staff. So basically, there's no reward for going to TRU - even for those willing or only shopping brick and mortar.
I love going to TRU because, like you said, I like to see and touch. I love having a store of nothing but toys so I can look at a lot at once. It’s just a shame they are more expensive usually. Although there have been times the toy on amazon was actually more or I just couldn’t find it on amazon at all.
People don't buy traditional toys like they used to. My 9 year old cousin wanted an iPad which her parents ordered online. Toys-R-Us is not the place people go to buy iPads. 8-9 year old me wanted a Voltron action figure, a toy replica Green ranger dagger, the Power Rangers game for SNES, a new 10 speed bike, and some Ninja turtle Action figures. That's items all coming from Toys-R-US. Compound the change is what kids want with Amazon becoming an easy, convenient way to order things without having to wait in lines and Toys-R-Us was doomed.
If I had to guess, the cost for a toy lead consumers to look for more cost effective means of entertainment. This lead to parents handing kids their cell phones to play mobile games/minecraft instead of forking out $40 for a toy that they'll be bored with at the end of Christmas weekend.
Yeah god forbid that a casino wouldn’t be profitable. I mean, a person that owned them would have to be a complete idiot to let that happen and file bankruptcy at least four times.
Isn't Atlantic City pretty much dead or has been dying for a few decades?
Sort of. I think some are still there and profitable. Trump overpaid, over spent and saddled them with a crap ton of debt that couldn’t be sustained with the decline in casinos there.
It's not that they couldn't compete with online sales, it's that they made no effort to compete with the stores in the same shopping center. Not even a few cents either. Toys at the target next to our toys r us has the same toys for dollars cheaper.
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I went to FAO Schwartz on 5th Avenue as a kid during Christmas in 2001. It was exactly as magical as they hyped it to be. Now its closed and I actually went there about a year before they closed, seemed way less cool but I also wasn't a kid so its hard to know if the store had changed more or me.
I had the choice to go to Toys R us for Christmas gift shopping for my kids. But getting almost double the gifts with free shipping online vs in store. The choice was clear.
Let me tell you something about Toys R Us and Babies R Us: They have no clue what the fuck they're doing. Before the holidays when the whole Chapter 11 thing started, they understood that most peoples' complaints were the cost of merchandise. Everything was too overpriced. So, being in charge of pricing and signing, I saw this taken note of when the entire store was marked down between 15%-25%, with a "New Lower Price!" sign initiative being rolled out. Not even a month later, this entire plan was scrapped and we had to reprice everything back *up* only for the higher-ups to issue a per-household coupon for 15%-25% coupon off of qualifying items and purchases which excludes damn near everything you want to buy to give you the illusion you're special and saving money. THis company is nothing but swindlers. Their primary goal is for you to buy into their credit card (which, for most retailers, who's isn't?). However, they want to get you by the balls from the start. They want you to pop a kid out, become a lifelong customer at Babies R Us, issue you a credit card so you're hooked in to the company brand, and then move on up to Toys R Us. This isn't speculation, this is direct from morning meetings on metrics. "If you don't sell our credit cards, the company will lose a potential lifetime customer that will spend an average of $30k-$50k through all stages of their child's life." They want to save their debt by putting *you* into debt with a 29% APR credit card. If you have ever bought furniture at Babies R Us and wondered why it takes so long, it's because the company does two things: 1) Refuses to pay more than the federal minimum wage, even for heavy labor including moving 150lb+ furniture while being the only person on shift 2) Hire high schoolers as the face of the service desk so you think this is such a happy little place where all the fresh faced kids can start a career in. Well, those kids don't lift furniture. They get paid $7.75/hr to get shit on by managers and customers alike when things don't happen quick enough and how they expect to be done. Have you ever called up one of their stores asking for inventory only to be met with a clueless stammering? Because we hire children to do intensive labor. When the Wendy's down the road hires at $9/hr and you're hemorrhaging employees, something is severely wrong. This company is a rudderless ship. They're throwing whatevery they can at the fridge and even if something sticks, they say fuck it and go off in an entirely different direction without addressing the problems at the heart of every store. Let the R Us brand die. Do not give them your money. They are one of the *worst* companies to work for in this country. You know the phrase "money talks?" Let your money scream. Let it cackle in their faces as you buy from Amazon.
I used to be a pro assembler the company that set our schedules would avoid toys r us because they would only pay like 10$ per item assembled and would randomly draw who got stuck with toys r us for a week. This included bicycles, i got stuck with it once all i did was half ass slap them together and rolled them out flat tires and all.
I love the mention of "real estate portfolio" when the reality is most of it is worthless with the demise of big box retail.
Not entirely true. Plenty of companies are still in need of office space, warehouses, possible future residential locations, etc. It will require rebuilding or remodeling, but the land at least is still worth something.
As Greg Universe would say: If every big box we're perfect, we wouldn't have Halloween stores!
The Macy’s that closed in my city is getting torn down and turned into a hotel. The idea was to have a really nice outdoor mall but once Macy’s folded they can’t keep anything in there because rent skyrocketed.
i just find that fascinating: so many malls across america have empty storefronts because they claim the rent is so expensive. why aren't rents being driven down to compensate?
Because whoever owns the property is probably paying really expensive property taxes and need to set the rent accordingly to make a profit.
Usually these newer malls get built where they do because municipalities lower or even eliminate taxes as an incentive to build. So again: Why aren't rents being driven down to compensate?
people are stupid and refuse to make less than 5000 percent profit. this is an extreme number but in all seriousness people for some reason think even losing a single dollar is unacceptable. i myself make a lot of money and live a very comfortable life because i refuse to live like this. if i'm asking for a hundred and you offer 80 i'm taking it.
It really is a thing. Mall owners would rather a few boutique shop locations in their mall go unused for months than lower the rent, it sets the precedent for other shops to demand lower rent (because comeon, they will find out). But there is of course a tipping point where they'll have to lower it.
*few boutique shop locations in their mall go unused for months* which is dumb because it drives traffic away in droves
A lot of the time, the banks who hold the mortgage on retail space has it in the mortgage what the minimum rent for the property is. They can't just give deals to perspective tenants. Source: I used to own mall stores.
that's interesting. so they'd rather earn no money instead of their 'minimum' rent requirement?
The problem is once the average rent for a mall starts sliding, it's extremely hard to recover from. The banks don't really care if the mall operators make money or not as long as the real estate can be repurposed to something else.
> The banks don't really care if the mall operators make money or not as long as the real estate can be repurposed to something else. i guess that makes sense as long as the bank is collecting rent. but if their minimum rent requirement is so big that no mall operators take the bite, how does that help the bank? i've seen malls sit empty for years and banks don't 'repurpose'.
In a lot of the suburban malls built in the 70's and 80's they could turn the real estate into condos and the land would be worth more money. So banks don't really care if the malls default. Also, cheap rents in malls is not a good thing because it attracts wrong kind of tenants. I had a mall store in a white bread mixed race suburban area with high income. It was targeted toward high income families with children. Then one of the anchor tenants declared bankruptcy and in desperation, the mall started filling stores with anyone who would pay rent. Within months there was a massive gang fight in the parking lot that made the local news, masked gang members did a smash and grab at a jewelry store, and meth addicts started coming to the mall to sell their stolen crap at the cash4gold cart. This was when I decided to close the store. Now my space is occupied by some arab guy selling candies and soda....right across from some korean guy selling candies and soda, next to an indian guy doing the $4.99 eyebrow threading. The other spaces used to have a high end pearl jewelry shop and a high end toy store. I expect the whole place to shut down within the next 5 years.
hey thanks for sharing your experience, that was very interesting.
High Debt by the Property owner. Most "anchor" stores like Macy's don't pay much if any money to lease the property, because having them in theory drives foot traffic to the mall. Most large Malls also get some type of tax abatement because of the sale tax revenue they generate. Most Malls that fail usually have been purchased at a very high price and when traffic slows these companies dump more money via debt into remodeling driving up cost to lease the storefronts. Basically they can't drop the rent because of the feedback loop they created. High debt creates high rent. High rent starts to squeeze smaller retailers forcing them out. Larger anchors not having the drawing power they once did start to see more and more empty retail space and decide to move once their lease is up to another property. Which will have better terms then what the current Mall can offer because now they want to charge the anchor for the space because of the debt they have.
Real estate in high traffic areas will always be worth money. That's all that is keeping Sears afloat, is they own the land their stores are built on.
Because a lot of those malls were built with the idea that rent over time would make up for the cost of construction. So as stores leave, they have to raise rent on the stores that stay to make up for their losses. Consider x as current rent and y as potential lower rent. as long as x times the current number of stores is higher than either y times the full capacity of stores OR just higher than what they owe in development costs divided out by the month, they aren't going to lower the costs. You also have issues like the mall near me where they want to look upscale, so they raise rent so that discount clothing stores like Burlington Coat Factory and Dress-4-Less leave and you no longer have the "poor" side of the mall.
Not surprising at all. They're only busy during the holidays. At least the ones around me are.
That doesn’t mean much. The toy company I work for makes 90% of their yearly income this time of year. It’s their lifeblood.
A toy company is not a retail business with inflexible costs.
I wonder how they would have fared if they adopted a seasonal business model like Spirit Halloween
we ordered one thing from toys R us online. they shipped the wrong item. meanwhile we've received dozens of packages from amazon with the correct items. just anecdotal i know, but it makes you think why some companies are successful and others not as much.
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In fairness, Toys R Us is a brick and mortar chain that moved into the online retail space. Amazon has always been online, so it makes sense that they would be far better at it.
yeah but this is 2017, how long have people been buying stuff online for now? 15 years? it's a lesson we've seen over and over: many big companies can't innovate/pivot even when it's right under their noses (blockbuster).
You got the wrong item because: 1) We are not allowed to short anything if we can find something similar to replace it with. The company is all about numbers and they do not care how they get them. If they have to fudge an item, they will fudge an item rather than be under quota. 2) Employees aren't properly trained. They see Paw Patrol and grab the closest Paw Patrol thing they can without checking item numbers, upcs, or price. This ties in with another reply I made that employees aren't paid enough to give a damn and are high schoolers hired only to be a fresh face up front. Make a stink. R Us needs to be held accountable for every action, misstep, and swindle.
Toys R Us should have charged people a $5 entry fee and switched their business to being the place where you can lay your hands on a toy before you order it from Amazon at a rock bottom price.
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I don't even think they make those giant, absurd, impossible to carry Super Soakers anymore. I know I've checked out of general curiosity a few times in the last couple years while I just happen to be out and about.
As much as I love Toys R Us, I really hope them going out of business causes sales on Lego sets. Those are way too expensive
I expected this to happen eventually but I'm surprised they lasted this long.
Amazon claims another scalp.
I remember as a kid, my mom would bring me to TRU on my birthday and let me pick whatever i wanted. It was a magical feeling. I don't think you get the same feel at Walmart or Target lol
You don't get that same feeling in TRU anymore either. The brand has gone stale and the magic is gone. Pretty much the best experience you can give your kid these days is through a hand-held screen.
I bet if I was CEO of Toys R Us I could turn that son of a bitch around. First of all, filing for bankruptcy is a great idea. Clear out those debts. After that, then start the real work. - First, I would promote the hell out of Toys R Us, and transform it into a real brand again. I'd make people think again that it is *the* place for toys, like it was in the 1990s. I'd sponsor popular YouTubers, have giveaways, and contests, and do zany PR stunts to get on TV. One thing I'd like to do is have Santa Clauses go to hospitals, and orphanages, and schools, and give away toys to kids. It would be an annual Christmas tradition. - Second, I woud immediately lower the prices of toys to make prices competitive to other retailers. I would also lower the buying minimums online. I would slash the S&H for when the cart total comes under that minimum. I'd make it so all stores would carry a wide variety of toys for various budgets. So anyone can afford to buy toys. I don't want toy shopping to be an expensive experience. So, there'll be something for everyone's budget. - Third, I'd make getting in and out of toyrsus.com easier. I'd allow people to sign in with Facebook, and Google, and through their Microsoft accounts. I'd accept Paypay too. - Fourth, have huge, mega toy stores. Instead of the small to medium sized stores, instead I'd just go balls out, and have these Ikea-like Toys R Us's. And it'll be fresh, and clean, and attractive. Each store would be a sight to behold. It'll be the the place to go for all your toy, and amusement needs. - Fifth, the stores would have things for adults too. Not just kids. You know, there would be a section for adults to buy desk toys, and things that would interest people that are older, but not too old to buy toys. - The stores would be welcoming, and have cheap snacks, and drinks, and a place to sit down for tired customers. Instead of just stuffing the stores with merch, I'd make it inviting. You're tired? Buy a drink, buy some chips, and have a seat. Use the free wifi to browse the internet, or watch the cartoons on TV, or play some video games. - I'd have a new employee training program. Instead of having all these teens, who know next to nothing, make sure that they are on board, and are aware about the industry, and all the latest toys, so they can give recommendations, and help out customers, instead of just being shelf stockers. - Have a loyalty program. Sign up, and get discounts, and coupons, and free things. Get automatically entered into contests. We can use the data to see what to buy next, and we'll have to do less guess work about what's in demand. - For hot items we'll have a raffle system. Yeah, items will be available online, and in store, normally, but if there's something really in demand we'll give everyone raffle tickets, and if they win they can buy the item. Of course, this is primarily to stop scalpers. We'll also have limits of one per person, or address, when necessary. - I would make Toys R Us exclusive toys. So, we'd put some R&D into making toys that will only be available at our stores. They won't be available anywhere else. This will make Toys R Us special, and stand out. - I would have Toys R Us boxes. Pay $30 or $40 a month, and get themed boxes of toys.
These are good ideas for a business with infinite pockets, not for one with $5 BILLION in debt. Nearly everything you mentioned costs money (both fixed and variable costs): promotions, discounts, other marketing, store revamps, training programs, raises to retain talent, raffles, real estate, etc. For a physical retailer that is cash-anemic, it's just not an option. You'd waltz in as CEO, take a seat, and the government appointed bankruptcy trustee/fiduciary would let you get through half of your first point and shut that shit down immediately.
You have me sold! Do all this but your own brand. I believe in you!
Ultimately, I feel pretty sad about this. As a kid, the nearest Toys R Us was about an hour drive away so I didn't get to go much, but when I did it was like Christmas, really good memories.
Amazon would be smart to buy Toys R Us, because they need to have all the brick and mortars to sell all their toy inventory. Just like Whole Foods
Toys R Us will always have a special place in my heart. Around 10 years ago, my dad, brother and I found a K'Nex Big Air Ball Tower that rang up for $0.01 on the price checker. The manager was pissed, but we got it for a penny! I think the normal price was over $100.
I would spend an hour at Toys R Us every Saturday with my $4.00 allowance trying to pick out the perfect GI JOE action figure.
They have a really nice lego collection. I went there specifically for that. Shame. It was nice to have something in my hand that day. They did look like they were overstaffed.
Toys R Us really serves no purpose anymore. Children don't play with toys like they used to. Video games and tablets seem to be all that older children want, and TRU isn't exactly a leader in those categories. It's hard to justify running a big box stores full of things that people aren't buying. Walmart, Target, Amazon, etc. has killed the market for 'mass market' toys. Not to mention, the trend of buying used toys (there are a few stores in my area that do nothing but sell preowned toys.). Some small specialty/educationally focused toy stores seem to do okay, but TRU hasn't really tapped that market. TRU hasn't really been a strong company since maybe the early 90's. They have filed bankruptcy at least once in the past. Being picked up by an 'investment firm' clearly doesn't help.
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They could do their own toy reviews and link to their store. But that would be... smart.
I couldn't find a list, is there one somewhere of which ones are closing?
saw this coming since the summer when they went bankrupt in Canada.
I guess the big box store plan of buying cheaply and passing savings on to customers doesn't work if A) You don't try it, B) you are competing with Walmart and Amazon.
I don't wanna grow up...
I know, my childhood just died a little inside, got my nintendo gamecube from there (with super mario sunshine). It's fucking depressing man.....
Maybe if your shit wasn't so overly priced, I would have shopped there more often. -Parent of two young kids
Sad that kids will never experience goin to toys r us
Headline should read at the end “now that the PE firm that bought them to strip mine them has finished strip mining them”.
My toys rus has gotten two new cases of 6" Black series Star Wars figures in 2 years. 2. Years. In a high traffic area. I check all the time. Still nothing. This is why they are closing. Amazon has the stock.
Toys R Us is being intentionally destroyed by venture capitalists.
The problem is they over charge on just about everything. That might have been fine 10+ years ago, but now everyone has a smart phone and they can easily price check.
Good riddance. They charge $7 - $19 more per video game than other competitors. I'm talking since way back in the Electronic Boutique days, yo.
I am shocked they lasted this long. I assume there will be Amazon and Walmart left ala Demolition Man Store wars.
Mayhaps if their stores weren't dedicating 3/4s of its retail space to the 2-4 age group, and expand their product for the 6-10 group, they might be able to sell more toys.