R.I.P. Toys R Us
- Thread starter Semiologist
- Start date
I’m impressed they made it as long as they did.
So that is books stores, video stores, and now toy stores....all gone.
Who’s next?
I’m surprised we still have so many brick and mortar banks out there. But not sure they will ever be fully extinct.
So that is books stores, video stores, and now toy stores....all gone.
Who’s next?
I’m surprised we still have so many brick and mortar banks out there. But not sure they will ever be fully extinct.
I think Toys R Us is pretty pricey. With that said, if they got on board with the whole online shopping movement years ago, they may have survived.
I don't think their problem was just brick and mortar vs online - it's that their pricing was SO high versus anywhere else. I know they have to cover overhead, but any time I'd go in there, it was enough of a difference that I wouldn't want to buy anything. That might have flown when people couldn't easily compare prices, but not any more. Adapt or die, and they died.
To add to that, there was no added value to justify the higher price. It's a pretty turrible in-store experience.
Nah, the leverage buy-out in 2005 saddled the corpus with huge debt obligation. The suits made off with a bundle.
Toys "R" Us' debt problems date back to well before Amazon was a major threat. Its debt was downgraded to junk bond status in January of 2005, at a time when Amazon's sales were just 4% of their current level.
The company's biggest problem: It was saddled with billions of dollars in debt. That debt stopped it from making the necessary investment in stores. And that meant an unpleasant shopping experience that doomed the chain.
But much of the chain's resources were devoted to paying off that massive debt load rather than staying competitive. When Toys "R" Us filed for bankruptcy in September 2017, it disclosed it had about $5 billion in debt and was spending about $400 million a year just to service that debt.
Even Toys "R" Us CEO David Brandon conceded in an SEC filing last fall that the company had fallen behind competitors "on various fronts, including with regard to general upkeep and the condition of our stores."
Link
The company's biggest problem: It was saddled with billions of dollars in debt. That debt stopped it from making the necessary investment in stores. And that meant an unpleasant shopping experience that doomed the chain.
But much of the chain's resources were devoted to paying off that massive debt load rather than staying competitive. When Toys "R" Us filed for bankruptcy in September 2017, it disclosed it had about $5 billion in debt and was spending about $400 million a year just to service that debt.
Even Toys "R" Us CEO David Brandon conceded in an SEC filing last fall that the company had fallen behind competitors "on various fronts, including with regard to general upkeep and the condition of our stores."
Link
Combination of poor management, inability to create a viable online experience, and getting Amazon'd. (edit: and suffocating debt)
Who's next?
As someone mentioned Sears/Kmart.
I'd add JCPenney (stock has had a nice ten year plummet from 85 to 3).
Federated has struggled mightily and lost 66+% of its value in the last three years.
Basically, anchor tenants of malls are feeling significant pain, how long can they go on?
Walmart is rolling out grocery delivery, including piloting same-day delivery in NYC. They always struggled to build in the city, partly thanks to NIMBYs, but with delivery using infrastructure from their Jet acquisition (and partnered with Uber and a few other on-demand companies) they don't need a facility in the city.
I've long held that Walmart should buy Lyft and become a true tech and logistics company, efficiently moving people and product, and sometimes both simultaneously.
Who's next?
As someone mentioned Sears/Kmart.
I'd add JCPenney (stock has had a nice ten year plummet from 85 to 3).
Federated has struggled mightily and lost 66+% of its value in the last three years.
Basically, anchor tenants of malls are feeling significant pain, how long can they go on?
Walmart is rolling out grocery delivery, including piloting same-day delivery in NYC. They always struggled to build in the city, partly thanks to NIMBYs, but with delivery using infrastructure from their Jet acquisition (and partnered with Uber and a few other on-demand companies) they don't need a facility in the city.
I've long held that Walmart should buy Lyft and become a true tech and logistics company, efficiently moving people and product, and sometimes both simultaneously.
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It really sucks there won't be a brick and mortar "toy store". I remember getting the Toy's R Us christmas book as a kid, and circling shit left and right. I tried that with my kids a 10 years ago, and it was jut a thin circular type of ad.
Shopping for toys in a wal-mart or Target just isn't the same.
Shopping for toys in a wal-mart or Target just isn't the same.
Agree. I don’t go to Walmart and target is ok but hey have a very limited selection compared to toys r us. It also will make morning of birthday shopping for kids parties more difficult.
Not saying JCP will survive, but they have made significant changes in their appearance, have a great e-commerce site, have changed their products to attract younger shoppers instead of old farts, and competitive pricing. I hope they do make it for the effort they've put in, but I can't see it happening with the mall leases they have.
That's what I mostly feel bad about, the experience won't be the same for my boys that are both under 3. I still remember the smell of Toys R Us, getting a nintendo game out of the locked case or picking a model car or boat out of the 100 choices. The catalog circling before holidays was epic. Toys R Us catalog and this one:
I remember doing the same thing with the Sears Christmas catalogue.
Yep, and BEST as well. They had the coolest catalogs.That's what I mostly feel bad about, the experience won't be the same for my boys that are both under 3. I still remember the smell of Toys R Us, getting a nintendo game out of the locked case or picking a model car or boat out of the 100 choices. The catalog circling before holidays was epic. Toys R Us catalog and this one:
I took my kids there for the first time about three weeks ago. Their prices were insane. Double online prices and 1.5 that of Walmart.
I got my butt kicked when I invested in eToys soon after IPO - Toys R Us had their battle plan in-place and struck back immediately. Big-box retail has consolidated across many categories, and now the big boxes themselves are starting to disappear.
The more expensive the purchase, the longer the brick & mortar retailer can maintain relevance in the purchase process. There are a handful of trends feeding into this process (adoption of ridesharing, mobile eCommerce, etc.) that do not speak well for the near-term future of retail.
The more expensive the purchase, the longer the brick & mortar retailer can maintain relevance in the purchase process. There are a handful of trends feeding into this process (adoption of ridesharing, mobile eCommerce, etc.) that do not speak well for the near-term future of retail.
So we have been doing the same as some of you, Walmart Toys, then ToysRUS toy shopping. In addition to the same toys being more expensive, TRU have a larger volume of top shelf toys. And I would submit that more and more people aren't looking to purchase a single $100 toy for their kids when they can get 2 for $60. With the disposable nature and movement to the next it thing, the need to purchase the higher priced/quality isn't there. Also considering the population is moving away from a middle class who might consider $100 for a toy (vs the $20 level), I would say the high dollar toys is also a thing of the past for the vast majority of the population.
Same issue if you go to Babies R Us, the prices on their items are WAY above Walmart etc. I ate the cost of the cribs because they were clearly better products and the convertible cribs should have a serviceable life until my kids leave the house.
My vote for next up is Sears Holdings. Doing a report on them currently because of their financial situation.
Same issue if you go to Babies R Us, the prices on their items are WAY above Walmart etc. I ate the cost of the cribs because they were clearly better products and the convertible cribs should have a serviceable life until my kids leave the house.
My vote for next up is Sears Holdings. Doing a report on them currently because of their financial situation.
This. I remember filling out the registry at Babies R Us when my wife was pregnant with our first child. At the time, I thought a baby store with a bar would be great since you could distract people from how badly they're getting ripped off.
They would also carry version of products made just for them, usually in a certain color, to avoid having to price match Amazon, which Buy Buy Baby will do. Usually those products made just for them were 20-30% higher in price than what you could get on Amazon. Rarely bought anything in there.
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One part I found interesting here is the section about toy manufacturers now needing a partner to test experimental and new toys
https://www.wsj.com/articles/with-death-of-toys-r-us-toy-makers-brace-for-major-hit-1521116575
https://www.wsj.com/articles/with-death-of-toys-r-us-toy-makers-brace-for-major-hit-1521116575
My company deals in the commercial real estate world, and at one of the recent corporate "town hall" type deals where the head honchos field questions from the plebes- the topic of brick and mortar retail came up.
The long and short answer was- traditional retailers are minimizing their footprints, or closing all together; while online stores are strategically opening brick and mortar stores.
The long and short answer was- traditional retailers are minimizing their footprints, or closing all together; while online stores are strategically opening brick and mortar stores.
Last time I went into a Sears there were no customers and one visible employee in the downstairs and another up top. I am not sure how they were keeping an eye on their merchandise. And to think getting their yearly catalog in the mail used to be such a big deal.
#gettingoldasdirt
#gettingoldasdirt
It was aamazing to me when I discovered you used to be able to buy a house from Sears. You would order a kit and put it together when it arrived. Here's one of the houses located in Jacksonville.
Toys R Us had some good discounts on their 'off brand' stuff when I went in their first of the month.
This monster comes with three dudes and it was $20.
But Legos and the like were not discounted at all, even as they liquidate.
It was aamazing to me when I discovered you used to be able to buy a house from Sears. You would order a kit and put it together when it arrived. Here's one of the houses located in Jacksonville.
Those old Sears Craftsman homes have an incredible cult following.
Interesting how much things have changed in the past 50 years. I like being able to remember the way things were before all the technology we have now. I suppose every generation has that to some extent.
For a high level reason of the Toys R Us failing here you go. It was the buy out. Looks like Planet Fitness will suffer the same fate in roughly 2 years.
My son bought that plane a few years ago from Toys R Us but it was $50. That was the first big item he saved up money to buy.Toys R Us had some good discounts on their 'off brand' stuff when I went in their first of the month.
This monster comes with three dudes and it was $20.
But Legos and the like were not discounted at all, even as they liquidate.
Who remembers this place from your childhood? It was like dying and going to toy heaven!
I think Legos are manufacturer price controlled. Only the manufacturer can mark them down. When I worked for a Computer store (located in the USA, hint hint), there were certain items that could not be discounted, even for an employee at cost purchase. Bose was one of those brands. One of the Orlando stores decided to test this with a Bose 3-2-1 system bought by an employee. Bose showed up and took all of their stock, and banned them from ever selling Bose products again. Every week the Orlando store would try to get my store to transfer them some product, and every week I would call them and tell to "stop trying, we aren't going down with you."
I was never a big fan. I'm old enough to remember BEFORE there was a Toys R Us, at least in my area. All we really had was KB Toys in the malls, which I was a big fan of as a kid.
That said...the demise of brick and mortar does trouble me as a consumer, just because of the limited selection of the very most broadly appealing and limited products you get at a Walmart or Target, whether it's toys, electronics, etc. Obviously, you can get anything online, but it's pretty damn tough on some things, toys for example, to really get a sense of it from pictures.
Did anyone have a Brand Names where they were? That had a prominent catalog when I was a kid. If I remember correctly, it was like a show room, where there was like one of a given item, and if you ordered it, it came from the back. Service Merchandise may have been similar, but Brand Names if I remember correctly was much smaller.
I feel like there may be something blended in that kind of space, massively reducing the footprint required. And maybe there's no attached warehouse in back...maybe you go into the store, check something out or can browse around, and if you like it, it's delivered an hour or two later to your house from a warehouse out in the cheap area of town.
There's a reason I guess that an Amazon is opening physical stores...there's still a need for real retail...but there's got to be a way to do it right.
That said...the demise of brick and mortar does trouble me as a consumer, just because of the limited selection of the very most broadly appealing and limited products you get at a Walmart or Target, whether it's toys, electronics, etc. Obviously, you can get anything online, but it's pretty damn tough on some things, toys for example, to really get a sense of it from pictures.
Did anyone have a Brand Names where they were? That had a prominent catalog when I was a kid. If I remember correctly, it was like a show room, where there was like one of a given item, and if you ordered it, it came from the back. Service Merchandise may have been similar, but Brand Names if I remember correctly was much smaller.
I feel like there may be something blended in that kind of space, massively reducing the footprint required. And maybe there's no attached warehouse in back...maybe you go into the store, check something out or can browse around, and if you like it, it's delivered an hour or two later to your house from a warehouse out in the cheap area of town.
There's a reason I guess that an Amazon is opening physical stores...there's still a need for real retail...but there's got to be a way to do it right.
That's what I mostly feel bad about, the experience won't be the same for my boys that are both under 3. I still remember the smell of Toys R Us, getting a nintendo game out of the locked case or picking a model car or boat out of the 100 choices. The catalog circling before holidays was epic. Toys R Us catalog and this one:
I worked at Service Merchandise "selling" electronics when I was first out of college. Bought my wife's engagement ring there while I was working there...$450, LOL.
The finally took it down, but until just the last year or so, the old Service Merchandise in Port Richey had it's store front sign still up. Pieces of it, at least.
There's one about a block from my office that's been converted to a reception area for the adjacent funeral home. It's a cottage style, looks a bit different than the one posted here
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