Update: Alive again! Toys R Us is now available to shop via Macys.com/toysrus and they will be opening Toys R Us shops in 400+ Macy’s stores in 2022.
Originally posted 3/15/2018.
As a millennial growing up in the 90s, I loved being a Toys R Us kid. But I’m torn about how I feel about the news that they will be closing all 800 of their stores.
Toys R Us replaced toy stores like Kiddie City, that failed to innovate in the 90s:
It’s not dissimilar to how Borders pushed out smaller bookstores before finding themselves pushed out by Amazon.
Amazon itself didn’t kill Toys R Us alone. It was a confluence of factors that included Toys R Us being saddled with $5.3 Billion in debt when they were taken over by private equity in 2005, by competition from even larger multi-purpose stores like Target and Walmart, and yes, competition from Amazon and other e-commerce sites. While Amazon had its most successful Q4 ever, Toys R Us reported lackluster sales figures that were the final nail in the coffin.
Obviously this is devastating news for the 64K employees of Toys R Us. Though once Amazon starts rolling out its vision of the store of the future, checkout clerks will likely go the way of the milkman, switchboard operator, film processor, and the flight engineer. Jobs like checkout clerks and truck or taxi drivers won’t survive this century.
On the one hand, there’s some regret that my kids may never have the experience I had running down the aisles of a store dedicated just to toys.
But as a consumer, am I going to inconvenience myself to go out to a retail store to pay more than I would pay to Amazon to ship items to my house?
My grandparents do just that, but millennials aren’t. They may give lip service to the demise of stores they grew up with, but words won’t save retail. Companies that don’t have a strong e-commerce strategy to compete with sites like Amazon will continue to go the way of the Dodo. But until retailers figure that out, my investments in Amazon keep looking better by the day…
Be sure to use up your gift cards and stay tuned for information on sales and closeouts, which will likely be happening soon at a store near you.
Which retail chain do you think will be the next to close the doors?
BDE
JC Penny
JC Penny is still open? Wow!
What role do you think recent glitches that DD members capitalized on played in the bankruptcy?
The numerous glitches probably made a dent in their P&L’s…but were one of the symptoms of the much larger problematic company mismanagement/lack of customer service etc.
Zero role.
And why is it so many people here assume it’s DD that does this. The volume here compared to SD is much lower.
Not that it makes a difference, but this is completely inaccurate. SD has a policy of not showing price mistakes on the front page. 90% of the visitors only look at the front page. Furthermore, clever SD’ers vote down the price mistake threads so that they should be unpopular so that there is a better chance of getting it honored.
DD tweets out the price mistake to thousands of people instantly.
That said, I love getting those tweets and try to snag a good price mistake whenever I can.
Regardless, a price mistake that cost them a few thousand dollars is absolutely nothing in the face of the billions they were in debt.
I meant more in the terms of deals – like the DD ‘effect’. Many of those have been elsewhere for hours and already barely working.
PM I do agree with as they generally get downvoted instantly and not put on the front page. Some are however but those are generally the less obvious ones.
But yeah, this latest round of incompetence was just a symptom if TRU issues, not the cause of it.
A drop in the bucket, if that.
None. Orders were mostly cancelled, and even an improbable loss of even ten-thousand dollars lost in sales from a price difference doesn’t fix a multi billion dollar deficit.
.0001 percent 5.3 billion dollars of debt from a private equity company?? how much loss was caused on their 2 price glitches? 20 thousand people got an avg of 1200 each in an extreme example 12 million max. 800 stores/warehouses!! 64k employees? are you kidding me ??
Will gift cards still work?
They do for now, but I wouldn’t wait long.
Schumer wants Toys R Us to cash them out. Sadly, they’ll most likely be treated as unsecured debt in liquidation, which means that GC holders will be paid last (read: won’t be paid).
Sad. Yes, blame it on Amazon, the scary soon-to-be Monopoly.
ToysRUs was in trouble when Amazon was still a book store. The amount of debt that had was insane. That and they never adapted. They can blame themselves for shutting down, not the competition.
I don’t know for sure but I hope it’s the US Post Office.
+1
Stores I would bet money on that they are closing in the next two decades or less:
First, the most obvious: SEARS, KMART Land’s End.
Here are some others:
JC Penny
Macys
Best Buy (Yes, them too)
Big Lots
Party City
Michaels
Neiman Marcus
Dillards
And tons of apparel chains, too many to list.
Will the site still be open?
Sears
you really have investments in amazon?
Absolutely. The returns I’ve made off them have been insane and Amazon is only going to get more and more influential in our lives.
is it still worth it to put into amazon as its so high already or it will continue going higher
Should have listened to this comment in 2018 😀
I do see Amazon still climbing, though perhaps not at the rate that they have been. But the potential remains massive.
U r 100% right as usuall. But better late then never Thnx will look into this. If i remember correctly u held of tesla stocks very strongly as well is that also still true.
I don’t like having a lot in 1 place.
Thnx so much
NASDAQ: AMZN can be had for $1,580 a piece.
Its a bit funny to see Toys R Us go and BH the yiddishe toy stores thrive more than ever before!
We are always a decade or two behind
Hahahahahaha! I like!
Thanks for the laugh.
Jewish toy stores thrive because Jewish peaple make time in their lives to go out with the kids and get them toys when they deserve it, which is much more exciting for the kids then to buy online.
They’re going to continue to thrive because their focus is not on the latest TV or movie tie in. The last few times I went.to Toys r us were very disappointing as compared to 20+ years ago. Very few toys that weren’t electronic or computer oriented, and mostly the aforementioned tie ins that are meaningless to my Israeli grandkids.
https://youtu.be/VvTplYFJUFQ
Sorry but millennial or not; there is no comparison between walking the aisles and touching and feeling the toys, trying the different buttons etc and sitting your child down in front of a computer and trying to figure out what they want. Frankly; it’s probably quicker going out to the store. I can buy most everything else online but I think toys- which is for a little child – is different. Sad to see this day.
Unsure of your point. You can still go to Target, Walmart, Costco and countless other stores with toys or toy stores. TRU was grossly mismanaged top to bottom and it has been over a decade with insurmountable debt. I’m shocked it took this long to be honest.
You can say the same thing about clothes or shoes.
But the market is speaking and it doesn’t look good for retail.
True and not true. I can view the shoes just fine from my computer screen. With convenient ways to return, it’s just not worth going to a store when the online selection is vastly greater. That said; obviously brick and mortar retail is heading down south, no questions about that. I was differentiating only by toys (and likely other items I am not thinking of now)
Dov, maybe you are different than I, but with regards to shoes I only buy them in a brick and mortar store. When I usually have to try on about 6-8 shoes till I find the one that fits and is comfortable, I must be there in person. I am not about to purchase and return 6 boxes of shoes from online. With some shoes I am a size 10, while others will fit better at a 8.5.
Totally agree. As a child, it was so exciting to go into the toy store and see all the toys. Now, I love taking my children there as a special “treat” or to pick out a present for a classmate. Sadly, hopping online/on Amazon doesn’t provide that experience.
Agreed. Amazon is the death place of product discovery and subsequently innovation. Countless innovative toys and kids products were created because they had a retail testing ground to launch at TRU that doesn’t exist anywhere else. Amazon is where you go when you already know what you want. The sad thing is that despite all the mismanagement, they weren’t even losing money, yet still had to close because their investors saddled it with debt. They had no margin for error, and no cash to reinvent themselves for the 21st century.
I also don’t think it’s the last we will see of TRU – they have many profitable locations that a new entity would be interested in taking them over.
And people went to TRU and then bought on Amazon. How is that model sustainable?
You are correct about the debt. But their Q4 results were not pretty.
Again, they were mismanaged and were able to be more competitive, but they simply didn’t. Their Q4 results were not pretty mostly because many vendors already stopped shipping them. Beforehand they were fine if not for the debt.
Didn’t they stop shipping to them because TRU couldn’t afford the stock. Hence the issue with Mattel/Hasbro trying to prop TRU up by handing them inventory and they still couldn’t’ sell that stock.
This all circles back to horrible mismanagement, massive debt and lack of adapting to the current market by TRU.
They couldn’t afford stock due to the crippling debt. They had to start closing non-performing stores to save money which sent warning signals to suppliers to start worrying about getting paid. That fear ended up making things even worse, as many suppliers that were willing to ship, would only ship with a cash deposit up front, which further made the cash crunch even more unbearable. So while you’re correct that mismanagement was part of the issue, it was hardly the catalyst for their closing. The amount of debt they took on meant they had to hit a grand slam (ie. everything had to be managed perfectly and build up online properly) or they’d go out of business. Take at look at companies JCP and Sears, they had much, much, worse performance the past decade but somehow are still around.
does this include babies r us
Yes
Sears
It’s their own fault too.
We ordered 3 different kids clothes ( very small and light weight).
These idiots shipped the 3 items from the same warehouse in 3 different packages, the same day.
You wonder why they lost so much money.
Plus they weren’t innovative.
I walked into a bunch of toys r us stores only to see one was more depressing than the other.
My 6 year old boy asked, sadness cracking his voice, “will they come back when Moshiach comes?”
Macy’s
Interesting. Apparently they are trying to save 200 stores in America (either by franchising or combining with more successful Canadians operations).
https://www.cnbc.com/2018/03/14/toys-r-us-is-exploring-a-plan-that-could-keep-200-stores-open-even-after-liquidation.html
For a B&M to survive, the retailer has to make itself a destination, not just a warehouse. Aisles filled with toys may have been a draw before e-commerce, but now you have webpages filled with more toys than any store could hold. TRU knew this – and announced plans to create foot traffic – but they never followed through.
In this article they talk about having play areas to try out toys and giving employees the OK to open boxes and demonstrate expensive toys. Experiences you can’t have online (yet!). Would have given a lot of people reason to walk in to their stores. But they didn’t put any of it into practice except the AR (which is pointless).
https://www.usatoday.com/story/money/2017/10/02/toys-r-us-has-plan-save-itself-and-its-unreal/702205001/#
Exactly.
dont do it dan! dont be busy with stocks big mistake to many gevirim i know personally and have dealt with that got wealthy from their fields of expertise like import/export or real estate in the late 80s and ninties had alot of money sitting around when they turned 50 and they wanted something else so they dumped money into something that they had no prior experience and was not their expertise. thats when they lost 80 percent of it . im one of them. stick to what your good at plus this website probably keeps you enough busy all day anyway.
Tell that to the money that has doubled in value just over the past year?
but I have experience myself should i give you my name to type on google. what about some acquaintances of mine that are/were well known in orthodox circles. taking their money earned from one thing they were good at like import/export and getting all excited about an investment idea when they never studied finance keep to your gesheft. hopefully not, bit if god forbid this does happen youll look back to the year 2018 when this comment was posted
Sorry but it’s “only” + 85% increase. Not double…:)
its a shame, the brand and store has value, the private equity buyers killed it off with all that debt, no doubt they made tons on the deal and left the brand to die a slow death. They could have competed, they have an edge just like bestbuy is thriving. No one to blame but the people who made that deal back in 2005.
i gave up when the times square store closed, a shame to see such a day
Good Childhood Memories. Thank You Toys R Us!
I still miss Child World (folded in the 90s).
I want to buy one branch and keep it open as an independent store. I’ll call it Toys weRe Us. Anybody in?
Yitzy… if you have money to waste them please be my guest
I blame those who use Toys R Us and other stores as a showroom and then order on Amazon. Stores have no way to compete when consumers are dishonest like that.
There is still Toys4U in Boro Park.
And Double Play and Toys to Discover.
I never shopped at Toys R Us bc their prices are so inflated. I only went there when they clearanced out their clothing in Baby’s R Us. I went today to use gift cards my kids got doe their birthdays and I just couldn’t believe how over priced everything was. As of now they are still processing matching so they price matched what I bought.
Sears. They have eliminated the consumer electronics sections and still maintain overpriced goods throughout.
It is a toss up between JC Penny and Sears.
Many K Mart stores have already vanished over the past three years, which is the beginning of the demise without anyone noticing.
Furthermore, now that President Trump is cracking down on trade I’m balance, those stores with large inventory of imported goods will begin to feel the pinch as UD made goods enter the market once again. What are you going to buy? A shirt made in Nicaragua or China or Jordan, or the one made right here in the US from US grown cotton and manufacture, be it in sore or on line?
Think about it.
Will TRU gift cards still be accepted in the new venue?
No. Those became worthless in the TRU bankruptcy
Alive again!
Lol! Funny way to post this update!
A fix salary of million to the CEO was a big factor, CEO should get based on company performance
their was no accountability for the CEO to be innovative, he just sat at meetings without thinking of tomorrow and shareholders and employees, allot of company’s think everyday of their competition and how they can be more innovative, better at their product of service and retail sales then the competition,
Dave Brandon took over the helm of Toys R Us. According to USA Today, Brandon marked the “fourth CEO over the course of 16 years” tasked with turning the company around.(and cashing out on a sinking ship)
The TRU brand is now owned by a company controlled and run by a Yid with a very Yiddishe Kopf
Will the original toys4you gift card work in these new stores?
Drive to Canada with the mishpacha and once again experience ToysRUs in all its glory!
there is a toys r us in yerushalayim- on king gorge corner yaffo.
Side note the company/brand is now owned by WHP run by a frum yid Yehuda shmidman