Next on the retail chopping block: Toys R Us


#1

Toys R Us has hired a law firm to help restructure its roughly $400 million in debt due in 2018, a move that could include the marquee toy store filing for bankruptcy, sources familiar with the situation said Wednesday.

Addressing the retailer’s debt load prior to the crucial holiday season could give its major vendors such as Mattel and Hasbro clarity into the company’s long-term viability to help ensure the toymakers continue to stock its shelves throughout the holidays.

Toys R Us has hired restructuring lawyers at Kirkland & Ellis to help address the looming payments, the people said.

Wayne, New Jersey-based Toys R Us blamed intense promotional activity and slowing baby business sales for its disappointing 2016 holiday results. The company, which relies heavily on holiday purchases to support its year-round business, saw same-store sales drop 3.4 percent from its last holiday season.

The weaknesses have carried into the spring, with the company reporting in June a net loss of $164 million in the first quarter of 2017, up from $126 million the previous year. Its same-store sales dropped 4.1 percent.

We’ll see how this goes. They may be able to pull ahead, but things are looking grim for Geoffrey.


#2

They were on the decline before Amazon was selling toys. Wal-Mart in particular was very aggressive in taking market share.

And now we’re in the digital era. Kids don’t want toys. They want phones and tablets, and apps to play on them.


#3

Toys are absolutely the kind of thing Amazon can devour. Lots of shelf space but only need to visit a couple times a year at most, and probably most consumers do not. Also Barnes and Noble has put in a strong showing for toys, I’ve pretty much bought all of my Christmas toy lists at Barnes for three+ years?

But Woolen is also right (to my surprise) - to some extent. I mean, they do have toys but they tend to be toys that “do things”. Toys that just sit there being plastic seem dead. I can’t get anyone to play with Legos - why make Legos when you can Lego an entire virtual world in Minecraft. My block shaped heart gently weeps.

Also, apparently not publicly traded.


#4

Aw, I liked Toys R Us.


#5

So did I. I loved going there for their Heroscape BOGO sales. And their Lego selection.


#6

Sequel commercial years later:


#7

I think I went into a Toys R Us once for a videogame deal. I didn’t even know they sold videogames until then.


#8

As a parent of a 7-year-old and a 4-year-old, I still visit Toys 'R Us on a semi-regular basis. My kids love various figures and playsets for said figures. And, lord help me, my kids respond well to a token-reward system that involves Shopkins and LEGO minifigs. Sometimes the best deals for such things are at Walmart, other times on Amazon, but often Toys 'R Us was competitive. I’ll miss them if they do end up folding.


#9

I thought LEGO were insanely popular these days? Weren’t there three feature length movies in the past few years, several TV shows, and a whole line of video games?


#10

My kids (7 and 3) can’t get enough LEGO stuff. No idea how that translates into broader sales trends though.


#11

Lego actually just announced their first down year after 13 straight years of record growth.

I think, if anything, they just grew too big too fast. Lego has been doing great in the “video game” era.


#12

I think they’ve been closing down their retail stores for a while now. The one nearby is gone, and the ones around when I was a kid are gone as well. Even with Babies R Us, it’s cheaper at Target, even cheaper via Amazon. Unless you’re going to test car seats and strollers, there’s little reason to set foot inside one.


#13

It’s right there in the song!


#14

Yeah geez I used to go buy ColecoVision games at Toys R Us, you’d have to be pretty out of it not to know that they sell video games and have since the beginning.


#15

I remember in the 80’s-90’s the video games section at Toys R Us used to have little plastic flaps that you could raise that had the box art on one side and the game description on the other. As a kid, I thought that was pretty cool.

As an adult, I still buy video games (although very few physical copies now… hm), but I’m not “allowed” to go into the video games section of Toys R US anymore. I don’t have the courage to walk in there alone as a grown man through the plastic balls and toys, little kids running and nagging their parents, then near the pink baby section, then into the video games section, with more kids running around. It’s too weird. Maybe they should make two entrances or something.


#16

I occasionally stroll through Toys ‘R’ Us simply to check up on what’s what in the world of toys and games and stuff. I work in pop culture often, and stuff like Barbie and G.I. Joe shows up in my classes from time to time. I’m always interested in things like how the toy makers and marketers position stuff vis a vis gender and ethnicity, what sort of messages are being sent, deliberately or not, and really, just what’s cool these days. And Toys ‘R’ Us used to occasionally have 21st Century Toys scale vehicles too, the kind of stuff I sort of on again. off again collect. But these days, nah, the store here is pretty blah.


#17

I remember in the 80’s-90’s the video games section at Toys R Us used to have little plastic flaps that you could raise that had the box art on one side and the game description on the other. As a kid, I thought that was pretty cool.

Oh man, I remember this too. And reading the back upside down, contorting to do so.


#18

Looks like capitalism is sharpening it’s claws for TRU. Suppliers are demanding cash for delivery of shipments.

https://finance.yahoo.com/news/toys-apos-r-apos-us-152300905.html?.tsrc=fauxdal


#19

And chapter 11 has been filed.


#20

Man, they are probably hoping to last through the Christmas shopping season.