After quite literally handing a head start to Amazon and enabling it to become it’s default connection for Customer’s Toys ‘R Us finds itself the latest victim added to the ever-growing heap at the retail morgue (see: Borders, HH Gregg, Circuit City, RadioShack, Payless Shoes, Sports Authority etc). That and the massive debt load (more than $5 billion) that it took on as a result of (over) leveraged buy-out by PE firms KKR, Bain Capital, and Vornado Realty Trust certainly didn’t help.
Toys ‘R US Chairman Dave Brandon said that today the company can operate free from financial constraints with the debt restructured under Chapter 11 and stores are supposed to stay open for the Christmas season where Toys ‘R Us earned 40% of its U.S. sales last year. He went on to say that this should also buy them time to invest in the business by improving the Customer experience (both in store and online). Part of that apparently will include closing underperforming stores whilst remaining locations would be reconfigured to be more experienced-based, incorporating amenities such as in-store play areas. But is it all just smoke and mirror at this point? Is a former category killer that rolled-up over small-town mom & pop toy stores have enough specialness in being a specialty retailer to turn it around?
http://www.chainstoreage.com/article/toys-r-us-files-bankruptcy?tp=i-H43-Q5S-4XI-6cbDX-1u-14Qs-1c-6cUEZ-12Dkn4&utm_campaign=BreakNew&utm_source=Experian&utm_medium=email&cid=17440&mid=97857547
https://www.wsj.com/articles/toys-r-us-once-a-category-killer-is-forced-into-bankruptcy-1505792620?mod=djemalertNEWS
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