Bankrupt Toys R Us Closing
I feel like it was just the other day I was writing about the sad news that Mayfair games was closing. Now another giant of games and toys is closing its door. With its closing a lot of our nostalgia goes with it. I don’t think any of us were too surprised to see Toys R Us closing, but I don’t think we really thought it would happen. The warning signs were all there. We just had to do a little bit of digging to see it.
Toys R Us was saddled with heavy debt acquired when Bain Capital and other firms took the company private in 2005.
By the time the company was approaching bankruptcy in 2017, it still had about $5 billion in liabilities.
Those debt payments turned out to be a metaphorical anchor around mascot Geoffrey the Giraffe’s long neck.
Its true that online retailers didn’t help the company, but most of its injuries were self inflicted.
The Closing of Toys R Us
Toys R Us’ decided to file for bankruptcy in September instead of shortly after the holiday shopping season. Something that turned out to be an awful move for the company . The holiday season is a time where Toys R Us needed to focus on their sales, but the bankruptcy case was an epic distraction. And it didn’t just distract the employees and company executives. As you might imagine, or experienced yourself, it was distracting for customers as well. I mean sure, if you live in the US you are no stranger to companies filing for bankruptcy. We still use many of these companies. Multiple airlines and car companies have survived bankruptcies. And most of us didn’t think twice about buying that new car of flying on that airline.
But in an industry where returns are part of everyday business and gift cards are commonly given out as gifts, any reason for questioning a retailer’s future during the holiday is enough to shop elsewhere. So once the announcement of Toys R Us’ bankruptcy became public, consumer faith tanked. And their holiday sales didn’t even reach their normal levels.
The Final Days
Toys R Us said in a bankruptcy filing Thursday that it will sell and close all of its US stores. This will include all of its products, fixtures and store signage.
That means we can expect to see massive sales at its 735 US stores. And those sales could begin within weeks, according to market experts.