Toy store chain Toys R Us is planning to sell or close all 800 of its U.S. stores, affecting as many as 33,000 jobs as the company winds down its operations after six decades, according to a source familiar with the matter.
The news comes six months after the retailer filed for bankruptcy. The company has struggled to pay down nearly $8 billion in debt — much of it dating to a 2005 leveraged buyout — and has had trouble finding a buyer. There were reports earlier this week that Toys R Us had stopped paying its suppliers, which include the country’s largest toymakers. On Wednesday, the company announced it would close all 100 of its U.K. stores. In the United States, the company told employees closures would likely occur over time, and not all at once, according to the source, who spoke on the condition of anonymity because they were not authorized to discuss internal deliberations.
Toys R Us, once the country’s preeminent toy retailer, has been unable to keep up with big-box and online competitors. The recent holiday season dealt another blow to the embattled company, which struggled to find its footing even as the retail industry racked up its largest gains in years. In January, the retailer announced it would close 182 U.S. stores, or about one-fifth of its remaining Toys R Us and Babies R Us locations.
What is going to happen to all the Toys R Us kids?
I guess they all grew up and kids today get their toys from WalMart and Amazon.com.
The glory of capitalism is its ability to engage in creative destruction. Businesses and industries are all subject to the strict discipline of the market. If they can no longer serve their customers in an efficient manner, they are destroyed to make way for businesses that can. The result is, hopefully, ever-increasing prosperity. We ought not to be over sentimental about the loss of Toys R Us. The company has not been functioning well for some time. If Amazon or Walmart can deliver toys to children cheaper and more efficiently, than so much the better for all of us.
I cannot help, though, thinking that we are losing something. I know using e-commerce to deliver products right to your door is more convenient. I know superstores like WalMart are cheaper. But, I am afraid that the children of the future are going to be missing out on something special, the delight in stepping into a store full of nothing but toys. Maybe smaller toy store chains will take Toy R Us’s place. Maybe not. I guess there is no stopping progress, if that is what this is, but I regret the losses along the way.
- Toys ‘R’ Us is a shell of its old self. How it got this way is a lesson for retail (business.financialpost.com)
- How Small Biz Owners Can Take Advantage of Small Business Saturday This Year (grasshopper.com)