Toys "R" Us Files For Bankruptcy Protection
 

Hope it works out for them.

Toys R Us is owned by companies that are owned by the people who used to run Bain Capital. This is their business model: buy a working company, load it up with debt, then go into bankruptcy to release the debt and pay off the investors.

Its how Mitt Romney made his millions.

TRU will probly survive, but only because they're the last true toy store chain in the nation. Many companies that were fine before the investors bought them had to close their doors because of this type of investor buying them up.

Even harder to get those marvel legends toys r us exclusives, also that hasbro Optimus prime masterpiece

That still worries me. I'm still sad about K Mart. It would suck if they went down too.

Yeah the Marvel Legends exclusives are so hard to get from them at times especially at stores. I've been fortunate to get all the Marvel and TF Exclusives online from them...

Very sad...but I can see why TRU is failing, and has been for several years. First, kids don't play with "toys" anymore, but TRU hasn't figured out that it needs to appeal to adult collectors, IMO. Like Saturday morning cartoons, most American toy manufacturers have faded away. I saw that a new 12" Captain Scarlet figure will be coming out in a few months. Would I EVER spot it at the local TRU? Dream on...

I cannot stand to set foot in the TRU here...chockablock full of junk that has been sitting there since the place opened. I cannot even remember the last time I actually found anything I was looking for, and purchased it, at a TRU. Action figures? The pegs that aren't empty are clogged with the absolute lowest common denominator available. I suspect scalper employees hawk whatever they can on ebay. These days I find 90% of anything I need on Amazon or BBTS or a few Asian websites. Very sad. I would much prefer to patronize local businesses.

I started collecting Kenner Super Powers figures in the early '80s. Still have 'em on my shelves. Even this little town had three independent toy stores in those days...two at the newly opened "mall." Remember those halcyon days? Back when Sears was THE go-to store for almost everything from blue jeans to car repair? Now our mall (minus every "anchor store") is a run-down hang out for parking lot thugs. Yet the #1 place for toys here, for many years, was Target. They got the latest Kenner & ToyBiz figures in profusion. I could pick & choose the best paint jobs. Later I was able to shop for a wide range of well-sculpted DC Direct figures at a few local "comic book stores." All are gone now. TRU won't be missed by me, but the nostalgic memories of the brick & mortar stores will remain.

Did anyone actually read any of the articles on this? They aren't going out of business. This isn't a liquidation or even an organizational restructuring. Store sales have nothing to do with this filing. They're restructuring debt that was due. Stores are actually making money, but can't cover the large amount of debt, $400 million of which was due this year. So they filed for protection while they're restructuring the payments on these. They've already secured $3 billion in financing.

Bankruptcy doesn't automatically mean you lose all you money and assets. Some low profit stores may be forced to close at some point in the future (pure speculation on my part), but that will all be dependent on what the final terms of the restructuring are. There's no clearance sales happening. Read beyond the headlines.

From what I understood, the BabiesRUs is the problem. TRU seems to be doing fine, but the babies R us is a big money loser for them bc of Amazon.

That's a problem of its own, yes. The Chapter 11 filing was largely based on them owing $400 million in the coming year, and $7+ billion in debt (against $6+ billion in assets) over the coming years. That wasn't a far enough gap to consider liquidation, as an extension and restructuring of payments could see them out of it.

They definitely need to rethink how they operate once this clears up. They don't carry enough other high profit items to become a loss leader (as Walmart and Target do). They also sit on enormous amounts of inventory of saturated product types (remote control cars, dolls, sports equipment, art supplies, etc.). The business side won't come out of this unscathed, but it's not like they're in danger of closing up the retail business any time soon.

I'm not surprised by this at all. In fact I'm surprised it hasn't happened sooner.

The simple fact that they charge more for practically every item in their store compared to other retailers deters me from buying there. I only buy exclusive items there, only because I have no other choice, obviously. They are also terrible at stocking product, so I hope that this bankruptcy opens their eyes and forces them to make operational changes.

i say again...that times square store that closed the end of 2015 was a site to see....i was sorry to see that go.
I remember the day i was in there and found out, I said to a female worker..."REALLY...you are closing, this store stays packed". her response was, "yeah, but that doesn't mean they are spending money"

Oh noes, where will everyone go to stare at the same pegwarmers for months now?

The Toys R Us 70 minutes away.

As you'd probably know if you actually read the article OR any of the other posts in this thread, this is NOT about how much business their stores are getting or how much stuff they're selling. This is all about internal handling of their debt.

Hahaha.

How do you think they got their debt?

They probably got their debt because they can't keep their toys on the shelf, right?

:rolleyes:

They got their debt because of mismanagement. Again, read the article, or read Joe Moore's messages. This isn't because they just can't sell product or something. It's much more complicated than that.

The reason retailers like Walmart and Target can charge less for toys is that they prefer to be loss leaders in that space. The profit margin for many mainstream toy lines is small in comparison to the other items those places sell. Their goal is to sell toys at reduced prices, not caring if they make a profit, in the hopes that shoppers will avoid the competition and also pick up other items that offer greater profit to them. Items like clothes, furniture, beauty products, home goods.

Unfortunately, a store like Toys R Us doesn't offer those higher profit margin items to spread out the cost like the bigger box stores do. They try to offset those mark downs by selling items those places don't and offering as many exclusives as they can.

Most of the current debt isn't from lagging sales, but from the holdover debt from the leveraged buyout in 2005 by Bain Capital, KKR and Vornado Realty Trust. They loaded the company up with debt so they could take it private, but that resulted in massive interest payments each year since. This is completely their own doing, of course, but has far less to do with day-to-day sales than the general public thinks. Yes, competition is fierce from their rivals, and it is eating into their bottom line, but that's not the root cause in this instance.

Every time I go they always have workers just standing around.

My TRU always raises the price on hot exclusive items when the 2nd shipment arrives. Like for newest 2 pack Joes... they were regular price when they first hit, but then the next time they would be 4 or 5 dollars more in store... then you would have to ask for a price adjustment to match the website, but that's only if they were in stock online... if not you had to buy them at the new more expensive price.

1. i thought this thread was closed.

2. there is a new toys r us in times square. 3 levels. BUT, it may only be until after the Christmas Season.

Here is an interesting article currently on MSN.


Why neighborhood toy stores are thriving while Toys R Us goes bankrupt


CCC.

Why can't every Toys R Us have a wealthy town built around it just like the ones in these people's bubbles?

Between these yuppies and the b-b-but-walmart-is-six-cents-cheaper crowd, no wonder it's feast or famine.