On Wednesday, the iconic toy retailer announced it was closing all 800 of its USA stores after 70 years in business. Lazarus, who remained at the helm until 1994, stacked the merchandise high to give shoppers the feeling it had an infinite number of toys.
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Local shoppers reacted with a mix of sad sentimentality and resigned indifference at Toys R Us’ announcement it will likely close most or all of its USA stores. Following the European branch, the US made a similar announcement last week.
Jim Silver, a New York-based long-time toy industry expert, said Toys R Us’s CEO David Brandon told employees the company’s plan is to liquidate all of its USA stores and after that, it could do a deal with its Canadian operation to run some of the USA stores. Toys R Us is owned by three companies – the private-equity firms Kohlberg Kravis Roberts and Bain Capital, and the real estate firm Vornado Realty Trust.
“I am very disappointed with the result, but we no longer have the financial support to continue the company’s USA operations”, said David Brandon, chairman and CEO of Toys “R” Us, in an official statement. “A customer can come in and say ‘what’s the hot toy for a 5-year-old girl who’s interested in this?’ and we take them around the store and show them”.
The American Specialty Toy Retailing Association, a trade group that represents almost 2,000 independent toy stores, manufacturers and industry sales reps, said in a statement Thursday that the closing of Toys “R” Us is “another example of the ongoing change and evolution” in the toy industry. However, an employee at the Columbus Park Crossing store, asked if the local workers had received the news, simply replied, “no”.
“I think the Canadian stores can stay open, but I don’t see them staying open in any kind of close proximity to the current format for the long term”, he tells NEWS 1130. Additionally, he urged the FTC to more closely examine how Toys R Us is bringing its operations to a close.
Toys R Us have said on their website: “Gift cards and vouchers will be honoured until Sunday, 11 March [2018]”.
“I am very disappointed with the result, but we no longer have the financial support to continue”.
Back in Times Square, the security guard at Toys “R” Us greeted shoppers with a smile and a cheery “Good morning!” but admitted the future was gloomy.
But over the past decade, Toys R Us had been losing ground. It also controls Asian sourcing giant Li & Fung, a major supplier to Western retailers like Wal-Mart.
The Canadian operations of Toys “R” Us are managed in Canada and operate autonomously from the USA operations, giving them a separate and healthy balance sheet, said Satov, but any buyer would still need to push for a discount.
The debt-plagued retailer first filed for bankruptcy protection last September. The company is trying to restructure its operation in such a way that other markets do not get hurt due to American shutdown. But those hopes dimmed after the chain suffered disappointing sales during the critical holiday shopping period.
“We’ve got no time to wait at this moment”.
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Toys R Us started out in 1948 as a baby furniture shop called Children’s Bargain Town. More8000 retail stores close down in 2017, thrice more than the previous year. The announcement comes after the dream toy company chose to shut down its United Kingdom operations at the beginning of the year.
