Toys R Us Preps To Liquidate US Operations

Bloomberg reports:

Toys “R” Us Inc. is making preparations for a liquidation of its bankrupt U.S. operations after so far failing to find a buyer or reach a debt restructuring deal with lenders, according to people familiar with the matter.

While the situation is still fluid, a shutdown of the U.S. division has become increasingly likely in recent days, said the people, who asked not to be identified because the information is private. Hopes are fading that a buyer will emerge to keep some of the business operating, or that lenders will agree on terms of a debt restructuring, the people said.

The toy chain’s U.S. division entered bankruptcy in September, planning to emerge with a leaner business model and more manageable debt. A new $3.1 billion loan was obtained to keep the stores open during the turnaround effort, but results worsened more than expected during the holidays, casting doubt on the chain’s viability.

  • joeyj1220

    I was in a Toys R Us not too long ago looking for a gift and was surprised that they still do the whole “pink section for girl toys” and “blue section for boy toys”

    • another_steve

      They’ve been around a long long time.

      Some habits are hard to change.

      • CB

        It’s not that habits are hard to change, but that consumers outside of the metro areas still demand that. It’s part of the MAGA/drumpf mentality.

        • Moebym of the Returners

          The simpleminded need everything to be segregated into black and white so they don’t have to think too hard.

          • Lizard

            Remember when Target decided not to have gender-segregated toy aisles anymore? The right lost their goddamn minds, claiming such a calamity portended the End Times.

            Oddly enough, no meteors began raining down. Funny, that.

          • CB

            Right. Because so many toys are sold for kids under age 4 before they have gender differentiated and then from 4-8 as they are developing their own sense of gender. You can’t apply adult understanding and philosophical opinions to kids. It simply doesn’t work that way.

          • Lizard

            See, you’re missing the point here. The right is terrified of this because then *gasp* girls might not like girl toys and boys might not like boy toys.

            To them, a 3-year-old boy playing with a Barbie is the End of Days, because what if he grows up to be transgender?! (Yes I know this is not how being transgender works, but they don’t and they don’t care enough to learn.) Or what if a girl enjoys Legos and wants to be a highly educated and highly paid engineer instead of a good Christian homeschooling stay-at-home mom? Mass hysteria!

        • another_steve

          Probably. And the mentality may even be more widespread than that. I have progressive friends who have kids and who still tend to get their little girls “girl toys” and their little boys “boy toys.”

          (hey…I’d like a boy toy myself…)

      • Lizard

        It’s not a habit, it’s where the inventory is, and that changes all the time. (I swear to god every time I go to Publix the store has turned inside out with how much everything shifts around.) If they haven’t changed it, it’s because they don’t want to.

  • Boreal

    Good thing the employees can always get another job in clean coal.

  • Bluto

    Perhaps if the nra, complicit politicans & ammosexuals would stop mass murdering children there would be a bigger demand for toys.

    • liondon#iamnotatraitor

      I would laugh but…

  • Butch

    I wonder if any of the news stories will mention that Bain Capital bought the chain and immediately loaded it up with debt; that, and not “competition from the Internet,” is the real cause of the bankruptcy.

    • CB

      Probably not, but remember it was Mitt Romney at Bain who was behind a lot of this deal, along with Vornado for the real estate. TRU is saddled with too much expensive real estate, and the $3.1B loan doesn’t cover the nearly $8B they are in the hole. That was simply to help them get on their feet.
      Their management is a bunch of idiots who have never been able to implement any plans or update the shopping experience. They spent $1MM on a website upgrade last September, and the executives awarded themselves $16MM in bonuses in December. In a word: it’s a shitshow.

    • boatboy_srq

      Of course not. It’s the it’s the retail equivalent of “nobody could have predicted…”; ignore the backstory and the questionable business practices in the M&A sphere and only look up when the acquired business founders.

      I miss FAO Schwarz something fierce.

    • dk

      exactly. I read that they couldn’t update stores properly because of “alleged” financial mismanagement related to this

  • Amanda B. Rekendwith

    If only they’d been selling AK-15’s.

  • another_steve

    The internet will eventually put all toy chains out of business – as it’s doing to the bookstore chains.

    Ordering at home, seated at a computer in your underwear, is so much easier.

    • Lizard

      It’s more than just convenience, it’s option. I could go to Toys R Us and half a dozen other toy stores hoping they maybe have something along the lines of what I want, or I could go on the internet, do a quick google search, and find exactly what I want in fifteen different colors.

      It’s a better model.

      • Uncle Mark

        TRU stores are notoriously messy, chaotic, overpriced, and tend to have horrible customer service (understaffed, long checkout lines, not very helpful in finding/ordering an item in another store, etc.) Being stuck between cheaper online stores and the Superstores (that offer groceries & toys) is bad enough to hurt them, but added to their longstanding mismanagement, it’s little wonder they’re going away.

        • Lizard

          I went to my local TRU store exactly once. It was all the things you described. I never went back. So headlines like this one do not surprise me.

          I felt the same way about Radio Shack.

  • liondon#iamnotatraitor

    Thank gowd we have goverment healthcare to fall back on… oh wait.

  • PickyPecker

    Damn. No more fun at the stores. 🙁
    http://i.imgur.com/4YvH1mE.jpg

  • stanhope

    Years ago, when trouble first appeared on the horizon, i said they should reorient the store to offer sex toys. I also said that Sears, in it’s supremely arrogant days, should have bought Walmart.

  • Longpole

    Time to ditch the 1980’s business model. The handwriting’s on the wall.

    • CB

      It’s more the model of Charles Lazarus from 1947 who wanted to create a “toy supermarket” for those returning from the war. They’ve never updated their business model successfully, and made a bunch of idiotic acquisitions. The Times Square store lost money every day, but the board gave the company 10 years to turn a profit. It never did.

  • johncAtl

    It’s only matter of time before the only places to shop will be Walmart and Amazon.

    • TuuxKabin

      goddamn it.

  • TexasBoy

    These are the only “toys” important to Republicans:

    Cricket childrens rifles.

    https://uploads.disquscdn.com/images/d11bf7abf713a05b6eb42f811c554481fd6263e2c734082970a06ddaf6f07e26.jpg

    • Lizard

      Haven’t multiple toddlers been killed by these?

      • TexasBoy

        yes

      • Frostbite

        But that’s ok, they weren’t aborted so the GOP doesn’t care any more.

        • boatboy_srq

          Those deaths actually a useful slvt-shaming tool: Mommy should have been able to watch over / train / hire good sitters to prevent that if she were a responsible parent, so it’s her fault the kids are dead.

      • Dreaming Vertebrate

        Especially if they are playing with them when a cop walks by.

        • Lizard

          Only if they’re black. (RIP, Tamir Rice.)

    • Moebym of the Returners

      Kids who are practically babies are mature enough to wield guns (and accidentally kill their family members), but teens are too immature to talk about gun control so no more of their peers will get massacred. Gun nut logic.

    • Treant

      I want a Red Ryder BB gun.

    • Ted.OR
  • Moebym of the Returners

    It’s really rather sad. The days of taking excited kids to the physical toy store are being replaced by the days of having kids point out what they want on Amazon from a tablet.

    It’s not quite as magical of an experience.

    • jimbo65

      And Christmas season was insane . I worked there in the 80s. And you’re right in the days before the Internet it was a different experience. It was mixed bag. You really saw some of the worst behavior during toy crazes. Cabbage Patch Kids anyone?

      • Joe in PA

        That was insane…my niece got one for Christmas…right in the height of the craze. Ugh.

    • Nax

      But on the other hand, looking at the Sears Roebuck at Grandma’s in rural Michigan gave me good memories in the late 60s and early 70s.

      • jimbo65

        That was fun going through the catalogs and lusting after the toys. Man just having some old catalogs from the 70s would be a collector’s item now.

        • Cucker “Dick” Tarlson

          They already are. Ones from the 50s and 60s are prime sellers for dealers. So few survived intact.

        • Ted.OR

          When I was young, per my parents’ instruction, my Letter To Santa should also include the page and catalog numbers of my desired items, so “Santa” would be sure to get the right thing. I think they also passed the information to relatives.

          Then I got older, and the same applied, except the Lafayette Radio and Allied Electronics catalogs replaced the Sears one.

  • Brick and mortar stores are all going to die, in this country. Everyone has realized: shopping on line is the best way. It’s also true that everything is cheaper when it comes from China.

    The only thing this country is still good at is food and entertainment. We can’t all make a living doing that, so a lot of us will suffer and die. The kids who survive will probably choose war, given that our arsenal is the biggest resource we have left.

    Move to another country, children. Germany is nice, Belize also. This country is going down, and like the Nazi state, now is the time to get out. You can have a good life elsewhere, if you leave now, and spend your American privilege while it still has value.

    • Tulle Christensen

      Yes, all durable goods will eventually be online only. I expect some pharmacies (drugs needed right away) and grocery stores (I surely would not buy perishables without personally seeing them, and yes I know that some people do)

      • Reality.Bites

        And lots of people want to examine clothing and other durable goods personally.

      • Butch

        But I worry what happens with the lack of social interaction. Maybe going to the grocery store isn’t a fun outing but it does get you out among people. What happens when all we do is sit at a computer and click on stuff?
        (BTW, I tried on-line grocery shopping exactly once. it drove me nuts.)

        • Lizard

          There are a lot of ways to get out among people. Grocery shopping isn’t high on my list.

          • Butch

            I just used grocery shopping as an example. I think the general trend toward on-line shopping is isolating.

          • Lizard

            Why? Shopping for a lot of people is a real chore and an energy-draining errand that has to be done. Anyone who enjoys it can still go to a store. Most brick-and-mortar stores are doing fine, if not quite as profitable as before.

        • PickyPecker

          Just got a mailer yesterday promoting chewy.com…where you can order pet food, etc. to have deliverd. NOT interested. I need to be able to check out the toys (and the food) in person…PLUS I get to bring my dog shopping to the store to do that!

        • Tulle Christensen

          I got to the local gay tavern for social intercourse

        • Jon Doh

          The only place I can find more out of stocks than my local supercenter is on-line.

    • TexasBoy

      Don’t worry Walmart brick and mortar will survive.

      • buckguy

        They’ve been stagnating for the last decade. They’ve cut staffing to an unmanageable point. They’re where Sears was not that long ago, except Sears still had some good will, whereas no one thinks much of Wal-Mart.

    • Reality.Bites

      Online shopping exists everywhere.

      I think ToysrUs probably suffered from being a specialty store where 90% of their top-selling products are also available in bricks-and-mortar stores people visit more frequently, like Walmart, target, Costco and many others.

      They also suffer from much of their product being bought as gifts. If I know my kid wants a Chicago Dyke action figure, I don’t have to see it or pick it out myself. Send one over.

      • Tulle Christensen

        You got me all excited, I want a Chicago Dyke action figure, but when I googled it all I got was some info on a parade

        • Reality.Bites

          Once I mentioned “my kid” you should have known we were in the realm of science fiction.

    • -M-

      Near the beginning of Neil Stephenson’s ‘Snow Crash’, it says:

      “There’s only four things we do better than anyone else:
      music
      movies
      microcode (software)
      and high speed pizza delivery”

  • Lakeview Bob

    So many memories at Toys “R” Us. The closing of the stores will be like losing a childhood memory.

    • jimbo65

      My first job was at our local TRU when I was 18 in the 80s. Good memories for the most part . Met a lifelong best friend as a result . When put in perspective of the shitshow these days I get nostalgic.

  • CB

    The Bain/Vornado/KKR buyout was supposed to be a quick turnaround. Typical arbitrage. Drain the company, sell the assets and pocket a lot of money. But they could never get it to a point where they could do another IPO after taking it private.
    One of the greatest mistakes ever was John Eyler taking diapers out of the stores. Suddenly TRU wasn’t a weekly trip every mom had to make for the least expensive diapers in town. They were undercut by Walmart and Target on prices, made idiotic acquisitions of FAO, Imaginarium, etc, and never implemented all their esoteric plans for modernizing the shopping experience.
    The new CEO came from the freaking pizza business and was meant to get the company ready for another IPO so that the investors could get their money out. But, the toy industry doesn’t work like other industries. Your fate is based on the whims of children.
    These egotistical, near-sighed money people applied all their “formulas” to the business, which weren’t relevant and drove it deeper into trouble.
    Sad thing is that many toy companies are getting stiffed from getting paid. The company stopped paying any invoices about two weeks ago, and while Hasbro only has about 9% of their business with TRU, Mattel has significantly more. And the smaller, private companies are going to be in deep trouble. Amazon, Wal_Mart, etc. can’t grow fast enough to take up the slack.
    Oh, and the employees are going to be SCREWED. No severance, no COBRA while the executives divvied up $16MM.
    It’s only going to get uglier. And all because of greed.
    (Much of my work is in the toy business, and I’ve been following this for a while.)

    • CB

      Oh, and brick-and-mortar toy retail is doing well in the UK, Canada and parts of Asia. It’s not that brick-and-mortar are going away; it’s that the idiots in charge of TRU had their heads in the sand and limped from quarter to quarter without making the changes they had more than 10 years to accomplish.

      • Taylor Bixler

        My understanding is that even if they wanted to make changes website or brick and mortar stores, debt service was so high that there was not sufficient money to do so? At least that’s what kai ryssdal tells me…

    • Reality.Bites

      “But, the toy industry doesn’t work like other industries. Your fate is based on the whims of children.”

      The entire world is now the tow industry, with the children being Trump and Kim

      • Tulle Christensen

        I don;t know about that, it’s been a long time since my car has been towed

        • Reality.Bites

          Obviously I meant to write toe.

          It just struck me that “toe” or “too” would be a far more logical way to pronounce tough that the actual one.

    • Jalapeño Business

      I was a store GM for several years back in the 00’s. Everything you say is absolutely true. It’s been doomed since the 2005 buy out.

    • AltheaTheCat

      When I worked at a TRU very briefly 25 years ago they sold a ton of diapers & formula. Customers often commented that the price couldn’t be beat. Even as a 17 year old I realized what a horrible employer they were, so I’m not sad to see them fail.

    • William

      Corporate capitalism at its finest.

    • Taylor Bixler

      Yup. Leverage buyout was a huge problem for them but I think their management was also piss poor and that combo doomed them.

  • TexasBoy

    We lost FAO Schwarz, and now Toys R Us. There really aren’t any real toy stores around anymore. Sad.

    • Joe in PA

      Pffft, the Apple store is still going strong. Just saying. 🙂

      • Snarkaholic

        And also The Pleasure Chest, which has an impressive assortment of, uh, never mind.

        • Tulle Christensen

          The one near me closed years ago.

        • Phil2u

          We support Adam and Eve; corporate headquarters just “down the road.”

        • Joe in PA

          I was trying to remember the name of that store! There used to be (maybe still there?) one in Georgetown near Wisconsin and M streets. Ahhh…good times. 🙂

  • 1980Gardener

    I loved bringing my kids to wander the aisles at Toys R Us, and the store will be missed.

    However, I am certainly part of the reason it closed – more often than not, I ended up buying a toy on Amazon.

    The silver lining is that the closure may give a lifeline to our remaining independent toy stores.

    • Friday

      It’s probably going to mean a lot more relies on advertising to *kids.* (So they can like ask for stuff, that is) Online shopping’s cheaper and maybe more convenient… if you know what you’re looking for, normally if I’ve got to get something for a kid, I need to go to a store, still have no idea what I’m looking at, then find some kind of idea in all that. 🙂

    • Treant

      Who can blame you? On Amazon you can evaluate something independent of the 999 other things around it, without the noise, and in the privacy of your own home.

      I bought most toys for my nieces online–mostly because a toy store for somebody with chronic migraines is absolute torture.

  • Hue-Man

    Earlier this week, the French equivalent retail chain – 252 stores in France – went into creditor protection, in part because Toys R Us’s bankruptcy has driven toy prices down.
    La Grande Récré sous protection pour achever sa restructuration et se vendre

    https://www.lesechos.fr/industrie-services/conso-distribution/0301380195303-la-grande-recre-bientot-en-cessation-de-paiement-2158546.php
    (I couldn’t find any English language coverage)

  • Tom Furgas

    When it comes down to brass tacks, it’s always shitty, greedy management that dooms most retailers. Except in the case of some regional chains (G.C. Murphy, Grants Zayre’s. Hills, et. al.) which were fucked over by Wall Street greenmailers, unworkable buyouts, and general ineptitude by the buyer’s-out.

  • Sam_Handwich
    • Boreal

      27 years, 27 years, 27 years………

      • PickyPecker

        Not enough.

        • Boreal

          I know but I think that is the max.

          • Tulle Christensen

            *sigh* and I was hoping for so much more

          • TuuxKabin

            Don’t we always.

          • Dreaming Vertebrate

            Yes, but don’t forget his sentence has to be jacked up 5555% just like a certain pill was jacked up from $13.50 to $750.

      • TuuxKabin

        27 x 3 = 81 years. I’m good with that.

    • Sam_Handwich
      • Boreal
      • AltheaTheCat

        I’m curious to know what his parents are like.

        • TuuxKabin

          from wikipedia:

          Shkreli was born in Coney Island Hospital, Brooklyn. His parents are Albanian immigrants from Montenegro[20] who worked as janitors.[21] The Shkreli tribe is native Shkrel region in northern Albania. He, his two sisters, and his brother grew up in a working-class community in Sheepshead Bay, Brooklyn.[14][22][23] Shkreli was raised Catholic and attended Sunday school as a child.[24]

          My experience: a rather isolated group of immigrants, they keep to their own community for the most part. A lot of dark, long leather coat wearing, in these parts anyway. Usually easy to spot, by dress and manner. There’s a restaurant near Columbia U, owned and staffed by a long time, established Albanian family. Been going for 40 years. Best Italian food in my book and it took years to feel welcomed.

          • Todd20036

            In other words, they raised him to be a better person, but the lessons didn’t take.

          • MaryJOGrady

            Weirdly, Texas has a lot of decent Italian restaurants owned and run by Albanian immigrants.

          • prixator

            Albania is just across the Adriatic from Italy. Maybe they share a spice palette?

          • TuuxKabin

            Same here. Really decent places. There’s a large Italian settlement in Albania, fascists exiled. Not sure their status now, but there was a period they were banned from returning.

        • Lars Littlefield

          Especially since it is obvious that he was hatched from an egg.

          • William

            I thought he was a form of coherent sline.

  • Ron

    I wonder how much money the CEO made running the business into the ground.

  • Irishsupporter

    That’s a shame, im from Ireland so there’s none here, but I remember as a kid visiting one when I was in America

    & also remember the poor staff!!

    • Treant

      They were an institution. By which I mean the place was usually so insane it felt like an institution!

      And frequently the staff sucked. Low pay, high demand, it doesn’t add up to a great worker.

  • Paula

    Donnie, save our jobs. Make the Army buy toys.

  • jimbo65

    There’s a fun documentary on Netflix called The Toys that made us. I forgot about the now long defunct Child’s World. Which at the time was the only competition TRU had.

  • Chris Harami

    Pisses me off..these big box chains rolled into every town, ran the Ma and Pa stores out of biz and now they go out of business leaving decimation and ugly empty buildings everywhere

    • Cucker “Dick” Tarlson

      And that leaves the other big box stores ** cough ** Meijer **cough** to go to court and challenge cities and townships to base their property tax assessments on the value of the CLOSED stores nearby, and not their own. It’s called “lights out assessing” and shithole stores like Meijer try bleeding local governments through legal fees until they get what they want. Of course, that means a serious drop in tax revenue, resulting in lower budgets for public services already under greater strain due to additional traffic and activity the big boxes attract. Assholes.

  • Paula

    The one near my house is in a shopping center undergoing renovation. They have a big sign out front that says Open during Construction.
    I guess not so much, after all. ☹️☹️☹️

  • Todd Allis

    What about the Russian “Я” in the name? Suspicious.

    • Hue-Man

      Ya.

  • boobert

    I go every week to 3 of them looking for diecast cars.

  • M Jackson

    There are going to be a lot of people out of a job and losing insurance next week.
    But don’t worry about the executives.

    http://money.cnn.com/2017/12/06/news/companies/toys-r-us-executive-bonuses/index.html

  • It isn’t just Amazon killing retail, it’s also folks doing leveraged buyouts.

    “Toys R Us and why the retail downturn is all about debt”

    https://www.marketplace.org/2018/03/06/business/toys-r-us-and-how-retail-downturn-story-about-debt

  • infmom

    “Leaner business model” = fewer people, getting less money for doing more work. Not at the executive level, thouigh.

    • CraigNJ

      That’s how the executives earn their bonuses.

  • JCF

    [This song was also used as the title re the rise and fall of (Sacramento’s own!) Tower Records]

    https://www.youtube.com/watch?v=oVx_8mj-UyE