Back in September 2017, the toy company, Toys R Us filed for Chapter 11 bankruptcy to keep their stores (including Babies R Us) open for the holidays. Today, the company will be closing its stores in the United Kingdom (UK) and in the United States (US). During a Bankruptcy filing this morning, the toy chain must liquidate for all 900 stores across both countries. Toys R Us has been having trouble keeping up with the competition such as Amazon, Walmart, Best Buy, selling their products a high price.
33,000 workers alone in the US that’ll be affected by this closing and the company will have enough money to pay their employees for “no fewer than 60 days.” It’ll certainly put some impact on the unemployment rate with this many workers out of a job. Stores in Australia, France, Spain, and Poland are most likely to liquidate as well. However there may be some hope. In the filing, the company is hoping 200 of the US stores will be picked up along with the Canadian stores from a buyer in Canada. No word if this includes any Babies R Us stores.
US stores will be closing one store at a time and not all at once. Toys R Us CEO David Brandon had this to say about the closing.
“This is a profoundly sad day for us as well as the millions of kids and families who we have served for the past 70 years. I am very disappointed with the result, but we no longer have the financial support to continue the Company’s US operations.”
Linda Kaplan Thaler, a junior copywriter at the time who wrote the Toys R Us jingle “I don’t wanna grow up, I’m a Toys R Us kid” told WNEP that she was “sadden” the outcome Toys R Us would become.
There’s been quite a few retail companies that has run into the same scenario with online retailers and having to close stores, Circuit City, an electronic retailer (similar to Best Buy) being one of them. There’s been a pattern on how these companies have been running into problems such as selling products at a high price and bringing in customers to help pay for their buildings, employees, and investors. Toys R Us has been trying to run more sales, selling exclusive products for a limited time, such as Nintendo’s amiibo but just wasn’t enough.
Customers will surely be going to the stores to pick up “deals” on the liquidation, however based on what has happened with Circuit City in 2009, those deals may not be all that great. If anything, the deal prices would compared to Amazon and Walmart, which is what should have been priced to stay in business. Some items such as Nintendo merchandise, video games, baby items, Legos, Barbies, and large toy products will be the first to fly off the shelves regardless what the price will be.
As for the buildings themselves, they’ll be tough to be replace. Lot of the stores are over 40,000 square feet and need some remodeling. Stores such as Best Buy and Dick’s Sporting Goods could use utilize these spaces but most likely won’t happen. Many Kmart stores that once ran are still empty to this day. If some of the stores can still be saved, maybe one day Toys R Us will make a comeback but right now, it’s not looking too good for the toy chain. Future generations will never know what it’ll be like to be a “Toys R Us kid” and waiting impatiently for the holiday catalog. For a trip back to the past, check out the video game ads from the 1996 holiday catalog in the gallery below.
UPDATE (March 17th at 11am ET): Toys R Us will no longer take returns once liquidation starts. Gift cards and reward points are on a timer now, use them up if you still have them!
Source: Forbes, US Today, Engadget