Toys R Us: “Not with a bang but a whimper”

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Updated March 14, 2018 at 11:00 AM

"Toys R Us, the iconic U.S. retailer, is in the process of drafting the court motion for its liquidation plan, a source familiar with the situation told CNBC on Tuesday.The retailer could file as soon as the end of Wednesday…"

"Toys R Us Prepares Plan to Liquidate Its Business"

CNBC, March 14, 2018

 Lauren Hirsch

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"This is the way the world ends 
This is the way the world ends 
This is the way the world ends 
Not with a bang but a whimper."

T.S. Elliott

"The Hollow Men"

 

Major media outlets are reporting that Toys "R" Us is close to an announcement that they are closing  all US stores. The company has reportedly ceased paying its bills and accepting gift certificates. 

The Toys "R" Us we knew (or thought we knew) is not coming back. As I write this, I remember my early impressions of the company from the 1980's and 90's when it was a robust, muscular organization, extremely confident, sometimes arrogant but always willing to take chances on new brands and new products. 

That Toys "R" Us sustained a toy industry middle class made up of small companies run by multi-generational families. When a toy company came out with a new product, no matter how small the company, they knew they could find a home at Toys "R" Us.

The company was the creation of the the entrepreneurial Charles Lazurus who grew it into a retail and toy industry behemoth.  Lazarus steered the chain through both fair and foul weather and finally retired in 1994. The company has never been the same. 

New management decided that the best way to compete with Walmart and other discounters was to be like them. Once dedicated to being "the world's greatest toy store" the company cut back on the variety of its products and as a result truncated its vision. What was once a great toy store was now more of a larger version of Walmart's toy department. This was bad for consumers, bad for mid-sized toy companies and ultimately bad for Toys "R" Us. 

Some very talented, dedicated people, some having worked at the company for decades, are going to lose their jobs. In addition, a great number of sales representatives whose families have serviced the chain for generations are also going to feel the impact. Some smart toy companies and retailers will employ them but many will move on to either retirement or other lines of work.

What companies are going to replace Toys "R" Us? What forms will they take? Who will lead them? What will the toy industry landscape look like in five years? That is the next chapter and we are about to see it written.

Goodbye Toys "R" Us.  Hello future. 

6 thoughts

  1. HI Richard,
    Very thoughtful article. It is truly sad and an end of an era. I grew up as a “Toys R Us Kid” in a multitude of ways. My Dad called on Toys R Us at Dolly for decades and often referred to them as “family.” Business is tough for all, but the memories will endure. Cheers, Carolyn

  2. Stupidity……arrogance…….failure to hire “toy” people. Could of and should of been the Amazon of toys 15 years ago .

  3. It is a very sad time for the toy industry indeed. I remember in my childhood that TRU was the best store in the world. The sad thing is when I had my own children 8 years ago, and made multiple shopping trips to Babies “r Us and Toys “r Us, I was always angered and disappointed with the lack of service. The employees of TRU simply just didn’t care. As a customer, if you can show me some respect, I’m not going to shop with you, period. But I often find this at retail these days. Sad.

  4. Truly a sad day for the entire Toys R Us family and all those in the industry. Yes, back in the day as a rep you knew that you had a decent chance of getting a smaller sized manufacturer placement with TRU. They supported the industry, and of course the industry supported them. Situation not good for anyone at all.

  5. Hasbro, Mattel, Jakks, & LEGO… all suffering from the TRU disaster. Good!!! These companies don’t want anything to do with small stores, and now their darling is folding. I hope Walmart decides to cut back on them too, then maybe they’ll be interested in selling to the little guys again!

  6. Hi Richard, this will totally change Toy Product development. No longer will you plan for a 4ft planogram that you had a hope of getting at TRU. Product lines will have less price points, less variety and as a result less choice. I think the Toy Market will shrink as a result and all the slack will not be taken up by the big three. The biggest winners could be specialty stores (those that remain!).

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