UPDATE 3/15/2018:
Toys R Us has officially announced that they are winding down their U.S. Business, with plans to close all of their stores in the United States. Liquidation proceedings have been officially filed (seen Here). They are keeping the option open to sell up to 200 stores to their Canadian division, but are proceeding with full liquidation. You can see the statement in full after the jump. My original post can be seen below.
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Word is coming in from multiple outlets now. Toys R Us, the last big box store focused mainly on toys and games will close it’s doors for good in the United States. Word came down earlier that Toys R Us stores in the United Kingdom were closing, and now we get the news that it’s U.S. counterpart will follow suit. Both CNN and the Wall Street Journal (subscription required) are reporting that no last minute save is coming, and employees have been notified to prepare for liquidation. From CNN:
“The iconic toy retailer will shut or sell all of its almost 800 stores in the United States, a source familiar with the matter told CNNMoney on Wednesday. About 33,000 jobs in the United States are at risk.
The company’s CEO, David Brandon, notified employees earlier in the day, according to an earlier report by The Wall Street Journal.”
Saddled with crushing debt by the private equity firm that purchased the company in 2005, the store chain was never able to recover. The new owners loaded it Toys R Us with debt through bank loans and acquisitions. They had hoped to find a seller who would take on the company, as well as the debt, but that never materialized. Day to day operations, leading up to the bankruptcy last year, were yielding plenty of cash. Unfortunately, any and all money that would normally be invested in infrastructure, re-branding, expansion and upgrades was simply lost in the high monthly payments to keep the debt at bay. From Forbes:
“While Toys ‘R’ Us said the “vast majority” of its stores are profitable, it will likely be reevaluating at its physical footprint during the bankruptcy process.”
It all came to a head in September, as the company filed for bankruptcy. Growing fears of the company going out of business, negative word of mouth, and increased pressure by Walmart, Target and Amazon contributed to a negative holiday season at the retailer, and they simply were unable to recover. From CNBC:
“Sales were down more than hoped as was traffic and the amount of toys in stock it got out the door. Meanwhile, its profits were squeezed as Amazon and big-box retailers Target and Walmart slashed prices to reel in customers. For these retailers, toys could act as bait, with the hope that once shoppers came for the toys they would also purchase other items with higher profit margins. Toys R Us doesn’t have any such buffer.
Toys R Us discounted roughly 10 percent more of its products in holiday 2017 compared with the prior year, according to Market Track. The company had a “material miss” on its holiday sales, said a person familiar with the results. This at the same time Amazon said it had its best year across the board.”
Unfortunately, this will lead to troubles for the entire industry. Both Mattel and Hasbro suffered losses on Wall Street this week, as news came in the retailer was likely to close its doors. Some analysts believe that toys sales will permanently lose more than 15% of their total sales with the closure of Toys R Us stores. The company was known for taking chances on smaller toy companies and more experimental products. Companies such as Target and Walmart focus more on trending items and long time popular brands, and simply don’t have the real estate to expand their toy aisles with unproven companies or product lines that were routinely welcome at Toys R Us.
As a website dedicated to modern and classic brands, we are saddened by the closings, and recognize that the industry will be undergoing some major changes in the coming months and years to compensate for losing prime retail space. While companies like Hasbro and Mattel, who focus on contemporary and evergreen lines like Star Wars, Hot Wheels, Marvel and DC Comics, will more easily shift their focus to compensate for the loss, smaller companies focusing on niche licenses and toy lines will more than likely need to refocus to keep up. It may be years before the fallout truly is felt for the second tier toy producers. In the end, we remember Toys R Us for what it was to our childhood, while also recognizing the sever mismanagement by an investment firm who had little interest in ensuring the long term viability of household brand name. So long Toys R Us…for better or worse, your loss will be felt.
TOYS“R”US TO WIND DOWN U.S. BUSINESS
WAYNE, NJ – March 15, 2017 – Toys“R”Us, Inc. today announced that it has filed a motion seeking Bankruptcy Court approval to begin the process of conducting an orderly wind-down of its U.S. business and liquidation of inventory in all 735 of the Company’s U.S. stores, including stores in Puerto Rico. Toys“R”Us will provide more details about the plans for the liquidation of its U.S. stores and going out of business sales in the near term.
Toys“R”Us also announced that it is pursuing a going concern reorganization and a sale process for its Canadian and international operations in Asia and Central Europe, including Germany, Austria and Switzerland. The Company’s international operations in Australia, France, Poland, Portugal and Spain are considering their options in light of this announcement, including potential sale processes in their respective markets. The Company’s stores in all these international markets are currently open and serving customers.
In connection with the sale process, the motion the Company filed with the Bankruptcy Court included bidding procedures for the Canadian operations. The Company also disclosed that it is engaged in discussions with certain interested parties for a transaction that could combine up to 200 of the top performing U.S. stores with its Canadian operations. While discussions continue on this potential transaction, Toys“R”Us is seeking court approval to implement the liquidation of inventory in all the U.S. stores, subject to a right to recall any stores included in the proposed Canadian transaction.
The previously announced administration of the UK business continues.
Dave Brandon, Chairman and Chief Executive Officer, said, “I am very disappointed with the result, but we no longer have the financial support to continue the Company’s U.S. operations. We are therefore implementing an orderly process to shutter our U.S. operations and will pursue going concern sales or reorganizations of certain of our international businesses, while our other international businesses consider their options.”
Brandon continued, “There are many people and organizations who have remained in our corner every step along the way. I want to thank our extraordinary team members who helped build Toys“R”Us into a global brand. I also want to express my appreciation for my colleagues on our board who have continued to provide support to sustain the brand and our operations throughout the restructuring process. I would also like to thank our vendors who we owe a great deal of gratitude to for their decades of support. This is a profoundly sad day for us as well as the millions of kids and families who we have served for the past 70 years.”
The Company and its advisors are working to minimize the impact of the U.S. liquidation on the Canadian and other international markets. As part of these efforts, the Company is implementing a transition services arrangement for the next 60 days and is developing plans for a potential shared service function to support the international operations going forward.
Additional information regarding the Company’s restructuring process can be obtained by calling the Company’s Information Hotline, toll-free in the U.S. and Canada at (844) 794-3476, or sending an email to [email protected]. Court filings and other documents related to the court-supervised process in the U.S. are available on a separate website administered by the Company’s claims agent, Prime Clerk, at https://cases.primeclerk.com/toysrus.
Kirkland & Ellis LLP is serving as principal legal counsel to Toys“R”Us, Alvarez & Marsal is serving as restructuring advisor and Lazard is serving as financial advisor.
The End is Near for Toys R Us and That's Bad News For The Entire Toy Industry
This is so racist....If those giraffes were still running the business like they used to, instead of being forced out by Caucasian men, AND if they still had those aisles full of nothing but race tracks, business would be flourishing right now instead of being in utter turmoil.
It's simple math actually.
This is very sad. I feel for all of the employees. So many buy online now,amazon and Disney will own everything in a decade.
I remember KB toys,child's world and now looks like toysrus will be a memory. Once a week my wife,son and I go to a toysrus. We were lucky to have 2 within miles of us. My son who is 4, loves that store. The memories of him running around there seem to already be fading.
I think of these wonderful marvel movie sets that were exclusive to them....where are they going....the sentinel set?
What about those D.C. Figures that come with clayface accessories?
The other exclusives that were coming....the others we will never know about?
Mattel,hasbro,lego.....they will be fine. The small guys. I worry. mcfarlane,mezco....seems only toysrus gave them any space.Diamond select in retail only showed at toysrus. Neca,maybe a walmart here and there. I worry big for Neca. They may survive,but the releases will no doubt go down.
I hope walmart and target step up their toy game and even ad an adult collector section. Target seems to be trying this to a small extent.
I hope something changes,but it looks as if this is the end.
If this happens, it'll be terrible for the whole industry. Hasbro, NECA, and a whole host of other companies peddle their wares at TRU. If they go under, it's going to hurt a lot of companies, a lot of employees, and a lot of collectors.
A lot of the neat niche collector stuff that we've been getting in recent years is going to go away forever if TRU closes, and that's a fact; companies like NECA will almost certainly have to scale operations back, take less chances, limit production runs, etc. I am so fucking bummed.
Plus, as stated, this isn't really TRU's fault. They were saddled with an insane amount of high-interest debt by the asshole private equity firms that bought them out in the mid-2000's. Even with a dip in business they'd probably still be fine today without all of that hanging over their heads.
The funny thing is that I just got a TRU credit card for the first time yesterday.
Toys R Us cares only for baby stuff, crayons and NERF guns. It never cared to adapt to the online market: the website, online inventory and prices are a sad joke (at least here in Canada). I am not at all surprised to learn the chain is going under.
I don't know the numbers, but collector-oriented companies like NECA won't disappear because of this situation. THEY will adapt. THEY will find a way to sell their products without the need of a brick store.
I live in a region where collector stuff is simply nonexistent anywhere else than online. No TRU or Walmart here carry enough NECA or Star Wars figures (or the like) that's worth the time and gas of a road trip. I read the toy news and reviews online, compare prices online, and shop online for my collector needs. So does the disappearance of Toys R Us from the landscape affect me as a toy customer?
Not at all.
Of course, I'm sad for all the employees who enjoy working for the big chain. But the market is as it is: Adapt or die. Toys R Us didn't adapt so...
Well, damn.
Granted, when it comes to the companies like Mezco/NECA, some other retail chain might step up to fill in the vacuum left by TRU, but that in itself will probably come with a whole slew of caveats that will affect the quality and standard set by those companies.
I remember being bummed after the demise of KB Toys, but at least back then we still had Toys R Us, which I never imagined would disappear. Now, things really will never be the same again, and that silver lining I just mentioned above doesn't seem all that shiny, really...
Dark days indeed.
I used to enjoy trips as a kid to toys r us with my parents grandparents. From buying action figures to nintendo,genesis,and SNES games. It was some where id enjoy going and i remember it fondly.
Let's fast forward to now though.... im an adult toy collector with my own son now and for those who know me over in the legends thread. Last time i went to my local TRU looking for a learning toy for my infant son. it was nothing but a big disappointment. Garbage on the floors, items not in the correct places with correct pricing,empty shelves, employees that had miserable faces on and not wanting to be there.as for those hard to find Neca,Mezco,etc. The one i was speaking about had a very small area with a limited amount of items. I think i've only bought one neca item during my last few years of being a collector.
Overall i'll miss the TRU of the late 80s and early 90s. The way TRU has become that is something i definitely WILL NOT miss nor lose sleep over.
I don't know the numbers, but collector-oriented companies like NECA won't disappear because of this situation. THEY will adapt. THEY will find a way to sell their products without the need of a brick store.
I live in a region where collector stuff is simply nonexistent anywhere else than online. No TRU or Walmart here carry enough NECA or Star Wars figures (or the like) that's worth the time and gas of a road trip. I read the toy news and reviews online, compare prices online, and shop online for my collector needs. So does the disappearance of Toys R Us from the landscape affect me as a toy customer?
Not at all.
Of course, I'm sad for all the employees who enjoy working for the big chain. But the market is as it is: Adapt or die. Toys R Us didn't adapt so...
A savvy collector will know to seek them out. The impulse buyer, the new collector, the fan seeing something that rekindles their genre love will never come across that stuff. Smaller companies that would wrangle prime shelf space will lose out even more. I look at someone like Just Play, who managed to get their surprisingly impressive Nickelodeon line set up in the collectors area. Stuff like that gets lost in the sea on hundreds of new pre-orders every day at places like EE and BBTS.
The worst and most sickening part of all of this, is how TRU Corporate continually screwed up through it's bad loans, lack of direction and focus, and mismanagement, yet a federal judge recently ok'd them to collect on their pensions and bonuses once the bankruptcy unfolded.
Meanwhile, employees and management at the store level was told by corporate that the writing was on the wall, and not to expect any sort of pension or severance should they be laid off, basically giving the people who busted their ass on this sinking ship the finger while they took off in the last lifeboat in frigid and shark infested waters.
To all of you who will say good riddance to the end of TRU, you will eventually feel the effects of this, as everyone else will, collector and non-collector. With no pressure from the toy giant, the box stores like Walmart and Target will now have free reign on the industry to do what they want, and the empty pegs that have lined their shelves these past few weeks, even as hundreds of new toys are debuting, are indicators to me that honestly, they don't give a flying **** about your toy collecting, or about toys at all. Without TRU, there will be no reason to market their product, to lower their prices, to do better. As long as you still come there to buy your shampoo, toilet paper, and underwear, they got you right where they want you.
Thank you Toys R' Us for being a part of my childhood, and for the memories that I have with you, both as a child stalking your halls for the latest G.I.Joes and Dino Riders, to stalking the aisles with my own son in search of his favorite, Lightning McQueen. Thank you for the lifelong friends that I have met through you. May we see you rise one day again from the ashes like a phoenix, but if not, know that many of us have and always will be Toys R' Us kids.
"I don't want to grow up,
I'm a Toys R' Us kid.
there's a million toys at Toys R' Us
that I can play with.
From bikes to trains to video games,
It's the biggest toy store there is.
I don't want to grow up, because if I did,
I wouldn't be a Toys R' Us kid..."
It's sad to see this go. I have a lot of fond memories not only as a kid myself but taking my now 10 year old there when she was a kid and just having her roam the store and stare at everything. Having said that, it has been years since I've actually shopped there. Their over pricing has been an issue for me for a while. Makes me wonder if their liquidation or close out sales will just be lowered to what every other store sells the products for.
It doesn't help that their prices are so much higher than anywhere else. Recent notable example, the Funko Stranger Things figures. 19.99 every where but try where they're 29.99.hard to compete when your prices are 50% above msrp.
I'll be sad to see them go. The last true toy store. Even worse that it sounds like bad Corporate strategy caused the demise.
One of the things that was thought in many economic classes and finance classes is the basic concept of when something falls, another takes its place.
I am not sure this holds true. I do not see another replacing it. TRU cannot really be replaced and is a major blow not just to the industry but families and Christmas memories and a bit of happiness.
Similarly how KBs was never replaced. There will be some know nothing person claiming, it's good that TRU will go, because....."insert unwitty, uneducated, not edgy comment here." But much like people shifting from the left to the right as they get older, those who are happy that TRU will go under simply lack knowledge and experience.
Sad that TRU couldn't make it. Death blow to those who love toys. Death blow to those who love competition. Death blow to those who love taking their kids to a toy store and watching their excitement. Death blow to those who simply loved being a Toys R Us Kid.
The future generation will probably never know what it was like going to a physical toy store and simply being blown away by the physical concept of seeing toys all around them.
A savvy collector will know to seek them out. The impulse buyer, the new collector, the fan seeing something that rekindles their genre love will never come across that stuff. Smaller companies that would wrangle prime shelf space will lose out even more. I look at someone like Just Play, who managed to get their surprisingly impressive Nickelodeon line set up in the collectors area. Stuff like that gets lost in the sea on hundreds of new pre-orders every day at places like EE and BBTS.
Sad day, and another nail in the coffin of traditional toys.
When I first started collecting action figures (Kenner Super Powers) around 1980, at least in this small college town, Target was THE place to go! One could thumb thru dozens of identical figures hanging from pegs to locate the best paint ops. Target seemed to get new cases of toys in every week or so, and back when a dollar was closer to a dollar in value, collecting action figures seemed an embarrassingly inexpensive vice. (The Super Target here still has a decent toy section. No toys at our floundering Sears in decades. No K-Marts remaining here. I will not go to our WalMarts...parking lot crime there is legendary!) Then our fancy mall opened that contained THREE toy stores. One by one, they closed and our TRU opened (next door to the mall). This honeymoon lasted a while, but over the past few years the gloomy handwriting was on the wall.
Toys? Face it. Kids are not as toy-oriented anymore, unless you consider video games to be toys. Our TRU still contains ~3000 BOARD GAMES. And rather dusty ones at that. Anyone care to play Chutes & Ladders?
Over half of our TRU was relegated to baby items. Not sure what genius determined that parents wanted to go to TRU to buy Pampers or strollers.
As for action figures? Any that remain on the pegs after TRU employees have cherry-picked to resell on ebay are truly pathetic. Weird, off-brands that never seem to be refreshed.
It is indeed a shame, because I did purchase some nice items at our TRU in the '90s...my 20" HTF Iron Giant, as well as some awesome, VERY detailed 1:18 scale WWII airplanes (that were only $35 at the time). Would I prefer to shop for items IN HAND and support local shops & vendors? You bet! But most B&M stores of ANY ilk simply do not have much if any INVENTORY in the backrooms anymore. They can order it for me? Heck, I can do that. Amazon, BBTS, not to mention Asian vendors are only a mouse-click away.
An earlier post about Sears got me thinking. When I was in college here, Sears was my ONE STOP. I bought everything there. Jeans. Appliances. TVs. Record albums (remember those?) I even had my car serviced there! Now? Well, about 10 years ago I happened to be at the mall Sears anchors, and remembered I needed some enamel paint. No problemo, right? I ducked into Sears...but could find no enamel paint at all. Finally I asked a teenaged floorwalker where to locate the enamel paint. After a fruitless search, he returned a few minutes later and told me (wait for it) "They don't make enamel paint anymore."
It is indeed sad that TRU is closing. I wish better decisions had been made by upper management. I wish a better understanding of their market demographics had been possible. If wishes were horses, rides would be free. Every year or so I might still drive out to our TRU, hopeful that some surprising new holy grail might be swinging from a peg...but I ALWAYS have left empty handed.
Mark my words:
In the not too distant future, a dirty bomb; electromagnetic pulse; or just a bad computer virus will wipe out electronics as we know it, and all those "game systems" the kids are hooked on will become nothing but paper weight. Parents will be desperate for physical toys for their bratty kids, toys will become the currency of the New World Order and those of us who have a basement full of toys will RULE THE WORLD!!!!
BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
This doesn't make sense. Will the make up their minds what the fuck they are doing? They keep changing their minds. They're either going to close 170 stores or all of them. WHICH IS IT?!
I guess I shouldn't bother trying to pay off my TRU credit card in such a big hurry anymore then if I'm not going to be able to use it much longer.
BTW, can't TRU itself sue Bloomberg for using their business as a front for making money illegally?
Many years ago TRU had a policy of matching any competitor's advertised price. In my area it was meant to drive Children's Palace out of the market. When they achieved that, they stopped honoring the policy. or years after that I referred to them as the Toy Museum, go to look but don't touch, then buy it somewhere else. At the time I had Walmart, Target and K Mart, and competition insured that it was possible to find anything at at least one of them. I was also asked by a TRU checker for my phone number and/or zip code. This was the first time I was ever asked for this at any store. I asked why. She said it was to determine where they needed new stores. I said 'You need to focus on maintaining the stores you have.' Finally, TRU is/was planning a major overhaul of their floor layout. This was planned for the Humble, Tx. store which has been closed since it was flooded out. It will likely not reopen at all now.
CCC.
I don't know about the rest of you all, but the prospect of having to possibly buy NECA stuff from online stores without being able to check the paint jobs first has me pretty fucking worried.
NECA will probably survive, but it won't be the same. I bet they're sweating bullets right now in New Jersey, and I don't blame them.
"I've never heard of such a brutal and shocking injustice I've cared so little about!!!" -Zapp Brannigan
Opps, for some reason I thought Bloomberg was tne name of the company that owns TRU, but that was just where the article came from. Who owns them? I can't find it listed in the article.
CCC.
Now people may start looking to their local comic store to stock these items. This might be a big deal, after all.
Keep reading: Toys R Us To Liquidate - Page 2
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