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Subject: What are peoples thoughts on the bankruptcy of Toys R Us? rss

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Sean Turner
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So, it was announced this morning that TrU is filing for bankruptcy and is going to close its stores in the US and Canada. Although I was not a frequent shopper there, I did find the occasional deal, and spent many hours there wandering the aisles when my son was young. I think young kids will miss out on the Awe that it was walking into a toy store that large. I will miss it in a nostalgic sort of way.

As for the actual Bankruptcy, who did not see it coming. They were stuck in the old business model for years. My thought has been that they should convert there stores into a place where kids could experience the toys. Let the children get there hands on actual games. I can't count the number of games I have bought at Cons because I got to play them as opposed to just looking at a box. (I even bought an expansion for a game I did not own with a plan to buy the game later) It would be much harder to say no to a child that has been playing with a toy and is happy about it compared to a child that has been staring at sealed box.
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Chris C
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AFAIK they are not closing stores at this point and the bankruptcy is primarily due to 5 billion US in debt they took on when they were taken private a decade or so ago. The massive debt servicing costs are restricting their ability to operate the business. The bankruptcy will allow them to restructure the debt and payment terms. Their main problem now will be getting suppliers to ship them merchandise on credit while the bankruptcy is taking place so stocks are not low for the upcoming holiday season. I am sure there will be some minimal store closures but the chain is not disappearing.
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Evan Dunn
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The important thing is that bain capital will be just fine so they can continue to sink profitable companies in the future.

http://www.rollingstone.com/politics/news/greed-and-debt-the...

Old article, but Scroll down and read the part about bane buying kb toys.
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fightcitymayor
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RIP Children's Palace



Oh, wait... they went under in 1992.

RIP Circus World



Wait a second, they died in 1990.

RIP Kay-Bee Toys



No, wait, they went under in 2008.

Looks like TRU is the last toy store standing.
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Kyle Hough
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The child in me really misses the KB clearance sections.
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Kevin L. Kitchens
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Can probably find thoughts in this thread from yesterday:

Toys-R-Us possibly filing bankruptcy
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Chris Laudermilk
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quietcorn wrote:
The important thing is that bain capital will be just fine so they can continue to sink profitable companies in the future.

http://www.rollingstone.com/politics/news/greed-and-debt-the...

Old article, but Scroll down and read the part about bane buying kb toys.


That's just...infuriating. A perfect example of what's wrong with a lot of people. I'm not sure if the mis-spelling of Bain is intentional or not, but it's perfect.

I hadn't heard about TRU filing until these threads showed up. There is a local store by me and my wife and I do holiday & birthday shopping there. Prices aren't always the absolute lowest, but are close enough and right-now available. We also use the customer rewards program a lot. Plus, of course all the memories as a kid myself going in and marveling at the amazing selection in that giant toy store. Hopefully things work out. I'd hate to see yet another brick & mortar store fall.
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Tim Earl
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Saltone wrote:
So, it was announced this morning that TrU is filing for bankruptcy and is going to close its stores in the US and Canada.


Umm, no, that's not what they said. They are restructuring under Chapter 11 in order to keep stores open.

Bankruptcy does not equal closing.
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Hedyn Brand
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Yeah, Chapter 11 is time-limited protection from creditors while they reorganise to become profitable again. There is a glimmer of hope if they have been given this protection, but it could still mean selling off branches.

Chapter 7 would be straight-up bankruptcy and what they get to keep is no longer under their control.

Good to see that the rest of the world is mostly profitable. I hope it includes my country, because it's mostly a toy duopoly between TRU and BR at the moment.
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Evan Dunn
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What toys R us does that other toy stores don't do is safety test everything. Especially when it comes to testing for lead. As the parent of young children, I value toys R us's services more than your average toy store, even if it costs a few dollars more than amazon for the same product.

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Shoosh shoo
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Theres no reason why these brick and mortar stores need to disappear but they certainly need to change the way they operate. When i worked there i was surprised to see how they operated. Honeetly if it was my company i would have turned the stores into depots where you didnt go to shop but to pick up stuff after ordering online. These fools cant ev en get their website in order. Their search function is terri le and very inaccurate if it works at all. What business thinks they can be successful in this day and age without having a functioning website?? Im speaking about toysrus.ca by the way.
 
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Adam P
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Quote:
With its filing under Chapter 11 of the U.S. bankruptcy laws late Monday, Toys R Us remains open but is protected from creditors’ claims while it works out a court-supervised reorganization plan.


It's staying open.
Looking at their Q report, they're working at operating loss.

 
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Chris Laudermilk
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shooshoo wrote:
Theres no reason why these brick and mortar stores need to disappear but they certainly need to change the way they operate. When i worked there i was surprised to see how they operated. Honeetly if it was my company i would have turned the stores into depots where you didnt go to shop but to pick up stuff after ordering online. These fools cant ev en get their website in order. Their search function is terri le and very inaccurate if it works at all. What business thinks they can be successful in this day and age without having a functioning website?? Im speaking about toysrus.ca by the way.


At least in the US my experience has been that they already are heading that way. I've purchased using the exact model you outline: search online (the US site has reasonable searching), purchase via the website & pick up in the store.
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Reminds me of Blockbuster 7 or 8 years ago, who also filed for chapter 11. Expect Toys R Us to disappear in the next few years. Makes sense, they are just not competitive and haven't been for the last 15 years.

I'll always have my fond memories of going in there when I was 10 and pretending like I had a million dollars to spend and making a giant list of toys I'd buy. RIP Toys R Us.
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Sean Turner
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klkitchens wrote:
Can probably find thoughts in this thread from yesterday:

Toys-R-Us possibly filing bankruptcy


Oh, sorry, I looked for a thread prior to my posting but did not see one.
 
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Sean Turner
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cheng wrote:
Saltone wrote:
So, it was announced this morning that TrU is filing for bankruptcy and is going to close its stores in the US and Canada.


Umm, no, that's not what they said. They are restructuring under Chapter 11 in order to keep stores open.

Bankruptcy does not equal closing.


you are correct, Teh first article I read said "only closing stores in the US" later changed to "only effecting stores in the US"
 
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cryptic
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The magical nostalgia of TRU unfortunately includes how they continue to stock cooking- and housework-related toys in the 'girls' toy section. shake
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Tim Collett
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The issue with Toys R Us is the same issue as many of these stores: they won't change.

What would bring me to Toys R Us outside of the name? You can get the same toys at other local retail outlets like Target and Wal-Mart. Same with the clothing and baby items. Electronics? Again, same stores but now you are competing with Best Buy and other electronics retailers. Prices? Same or higher than most places. Online shopping? Nothing to brag about. This doesn't even include Amazon in the mix for how people shop now.

They have to change their business model and find a reason to make themselves unique. People argue that Wal-Mart kills but sometimes it is the refusal to change that kills.

Toys R Us needs to carry items that other places don't have. They have to figure out how to compete from a pricing level and find a reason to reach out to consumers. They need a re-brand.
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Walmart isnt any different than TrU. Ive worked at walmart as well and its the same shit. The difference is they have a bit of everything. In terms of toys i think the two stores have pretty much the same crap, but TrU has more of it. There really isnt any choice... You go to both stores they have the same lego sets, the same board games for the most part, the same generic toys (seems to be paw patrol, pj masks, minions, barbie, etc.)

Again im speaking in terms of what its like in my city. All these stupid mini shopping centers popping up in different parts of the city and its all the same stores carrying the same crap, just different amounts of it. The variety is honestly pathetic! So yeah... For anyone wanting to keep theor business alive they definitely need to make themselves unique. But then again theres a risk in that as well because if you choose to be unique and not enough people become interested, then u cant survive bc u do t have enough customers.
 
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Robert Briggs

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We live in a rapidly changing world which is harder for large corporations to wrap their heads around. Brick n mortar stores are facing tough competition in a competitive environment with the added pressure of commercial property leasing which continues to climb and be costly something not felt as much by on line retailers who don't have to pay the price of location and visibility. Take into consideration the cost of borrowing to fuel the expense of retailing you begin to see the under current that leads to financial difficulty. The consumer wants the deepest price cut which they find mainly on line. Employees want more money, I have watched how the 15 minimum wages is seeing an increasing number of store closures in the Seattle marketplace so it becomes no surprise to see the obstacles which have brought toys r us to the brink. As already noted in the toy business they are not the first to struggle they just might be the last for their genre in the Brick n mortar segment. The odds of a true comeback is a long shot
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Steve Greasby
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The sad thing is, the bankruptcy is mainly due to the debt that they took on when purchased by Bain capital. These firms buy companies, shift debt from one to another, and then let ones with all the debt fail, protecting the companies whose debt just disappeared. They were predicting this back when Romney ran for president. The fact that TRU lasted this long is a credit to the company. They likely would be just fine had Bain not assigned them the debt.
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Chris Laudermilk
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sgreasby wrote:
They likely would be just fine had Bain not assigned them the debt.

Seems to be a recurring theme...

I need to go read about some games now. Thinking/reading about those #)&%R@)(& just pisses me off. angry
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Evan Dunn
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Yeah, it's hard to blame a retail chain for not keeping up with the times when there's no investment put into the chain's actual success. If the people at the top are determined to squeeze every dollar without care for the health of the company, then they're not going to hire people who will bring in the kind of modernization they need for long term sustainability. This seems like a major factor in terms of USA companies staying competitive.

The Koch brothers did the same thing for our lumber companies according to a rather lengthy thread I read on reddit in April in response to Trump's Canadian Softwood tariff. Regardless of how you feel about our lumber competitiveness with them, there was a lot of talk about how the Koch brothers bought up a large number of American lumber mills, then under-invested in them to get the maximum return, leaving them using older, more dangerous tech compared to the Canadian mills. The lower pay and more dangerous work in the US tends to also have higher turnover and lower talent workers, compared to the Canadian mills, which pay (I think) reasonably well by comparison.

If you want to deep dive, I found it an interesting read:

https://www.reddit.com/r/worldnews/comments/67d5w6/us_to_sla...

The reason I mention any of this again, is that we have this strange problem in the USA were we point fingers at businesses for failing to keep up with the times, when in reality, there's a significant and apparently frustratingly unavoidable reasons these companies don't act in their own best interests.

Are we doomed to a cycle of life where any successful business will be pillaged and left dead by these types of investment firms, creating an opening in the market for a new player who will rise to prominence, only to be consumed themselves? Are we just looking at the life cycle of a corporations in the face of investment firm cancer?
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Hedyn Brand
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We have a term for people like Bain and the Kochs here - bankruptcy jockeys. Their business is destroying businesses.
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Tim Collett
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I don't disagree with you at all on this, but some of the problems began before TRU was bought out in 2005. TRU hasn't always helped themselves either. Their business model has been to make the majority of their money during the Christmas holiday season (so 2 to 3 months out of the year).

Their problems began in the late 90s. Wal-Mart started stepping in their territory and they didn't respond very well. Let's be honest...if you are a toy company and Wal-Mart says they will carry your items, most people would be thrilled just from having more exposure in general.

They eventually moved their online sales to Amazon in the late 90s after they had a huge issue with being able to deliver on time (which ended up in a whole other problem for TRU and Amazon with TRU eventually leaving Amazon all together).

Their online abilities were really good not that long ago but then things started sliding and here we are.

The truth is things have changed a lot when it comes to kids and toys. Electronics now dominate for a lot of kids' requests for holidays. I am 44 and the toy world is very different now than back then (I even had toys in color and not black and while LOL). I have four kids and the majority of items they want either TRU doesn't carry or if they do carry it, I can get it at a better price in many other locations (online and B&M).

I don't think of TRU for electronics.
I don't think of TRU for board games.
I don't think of TRU for sporting equipment or bikes.
I don't think of TRU for baby items.
I don't even think of TRU for toys anymore as a first option sadly.

I know I am not alone in this. If I want a toy for the kids or for a birthday gift or whatever, I usually go somewhere like Target or Wal-Mart. Why? Most likely I am getting the same price as I would at TRU, I don't have to go out of my way to get it plus I can pick up other things while I am there like groceries, paper goods, etc.

TRU had a niche market where they were able to stomp out the competition and keep that market to themselves for a long time. Eventually someone comes in and wants to play in that market, and when others came in this time around, TRU wasn't ready or didn't take them seriously or whatever we want to call it.

Add in that a lot more changed around them than what they could control between being bought out like they were to kids and toys not having the same relationship that they used to have. We may be watching the end of an era.




quietcorn wrote:
Yeah, it's hard to blame a retail chain for not keeping up with the times when there's no investment put into the chain's actual success. If the people at the top are determined to squeeze every dollar without care for the health of the company, then they're not going to hire people who will bring in the kind of modernization they need for long term sustainability. This seems like a major factor in terms of USA companies staying competitive.

The Koch brothers did the same thing for our lumber companies according to a rather lengthy thread I read on reddit in April in response to Trump's Canadian Softwood tariff. Regardless of how you feel about our lumber competitiveness with them, there was a lot of talk about how the Koch brothers bought up a large number of American lumber mills, then under-invested in them to get the maximum return, leaving them using older, more dangerous tech compared to the Canadian mills. The lower pay and more dangerous work in the US tends to also have higher turnover and lower talent workers, compared to the Canadian mills, which pay (I think) reasonably well by comparison.

If you want to deep dive, I found it an interesting read:

https://www.reddit.com/r/worldnews/comments/67d5w6/us_to_sla...

The reason I mention any of this again, is that we have this strange problem in the USA were we point fingers at businesses for failing to keep up with the times, when in reality, there's a significant and apparently frustratingly unavoidable reasons these companies don't act in their own best interests.

Are we doomed to a cycle of life where any successful business will be pillaged and left dead by these types of investment firms, creating an opening in the market for a new player who will rise to prominence, only to be consumed themselves? Are we just looking at the life cycle of a corporations in the face of investment firm cancer?
 
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