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March 2018 Retro Gaming Article

March 15, 2018 Retro Gaming Blog Post:

Toys R Us has ended, unable to escape it's debt combined with current retail conditions

Nokia 8110 phone
Children will now grow up thinking WalMart is a toy store. That is tragic!
As the top executives began siphoning millions of dollars "to retain key players" in the Toys R Us restructuring... they all knew. Filing for bankruptcy protection last September, we all hoped they could save the store so many children grew up with. But green prevails in all situations. Amidst heartfelt sorrows, their CEO will likely depart a much wealthier man.

Bankruptcy bought time. Closure was inevitable.
Turning TRU around wasn't going to happen in a few months. Such endeavors can take more than a year to even show a slight upturn. So three months after paying out exorbitant retention bonuses, the upper echelon realized their white knight wasn't going to arrive and buy them out of the mess they made. So, they shut it down and will undoubtedly find another institution to destroy. It's what we do as humans.

Aside from children growing up thinking WalMart is a toy store, the other cultural loss is simply the end of toy stores. Many strip malls will find it hard to find a tenant who needs the vast spaces that Geoffrey once roamed. This is the tragic end of an era and nothing outsmarted TRU and came swooping in to fill the void. Toy stores, like small books stores will dwindle until everyone has a WalMart rewards card in their possession.

How & Why

Greed reared it's ugly head. Golden parachutes for copper executives.
Across the comment sections of every duplicated story about Toys R Us' demise you'll find angry penny-pinchers complaining about the pricing structure at TRU and how they deserve what they get for charging so much. These people are victims of our failing education system. Idiots. Saddled with five billion dollarsof debt, whether you sell barbie dolls for $35 or $12... you aren't going to reduce your debt through sales volume alone. You require an additional miracle.

Like the housing and mortgage debacle a few years back - you had winners and losers. Everyone involved had sought a $250,000 home, but gladly signed up for a $600,000 mortgage knowing the outcome was uncertain at best. Being homeless was the other end of that scale. Toys R Us, in this example, is now homeless. Some of those home buyers lucked out and their homes appreciated in value and they restructured their mortgages or sold their homes. It was a matter of timing. Those who were lucky got out. The others were buried. TRU found themselves in a similar quandary.

It must have been e-commerce, right? All those online shoppers who never leave their houses for anything - they ruined Toys R Us. Again, not true. The numbers don't add up. Sure, Amazon and other online outlets have taken customers from TRU, but those numbers alone don't add up to it's demise. In fact, without the debt, TRU was quite profitable. Brick and mortar retailers need to bolster their online capability and turn their retail stores into destinations that enhance and educate consumers about key products. It's not brick & mortar versus e-commerce. The two need to work together.

I'm sure TRU executives thought they could merge or sell or do something to combat the enormous debt they took on through a leveraged buyout. Like some of those homeowners who were in the right spot at the right time, TRU may well have been able to "find a resolution" and continue onward.

"Greed works"
-Gordon Gekko
Alas, when you spend all your time and money seeking options, you tend to ignore what is right in front of you. In their case it was an aging infrastructure, decades behind it's rivals. When you struggle for ten years to pay your "minimum due", you don't have the luxury of keeping up with the times and renovating your operation.

Most of their stores look the same as they did in the 80s. My local TRU store hasn't changed it's layout in over a decade. It's safe to say this story was finalized years ago and the senior management team either knew it or was too stupid to be in management.

Cultural Loss

I will dearly miss Toys R Us and the amazing variety of products they sold. It was my go-to place when shopping for my son... and often for myself. No one will ever have the breadth of products found at Toys R Us. It's a shame is was ruined by financial decisions motivated by greed. A lot of circumstances when into it's demise, but greed was the ultimate ruination.

I know of a few indie toy stores in my area, but they cater to a different set of toys. TRU may have been seen as a "box-store" lacking the local vibe of an indie store, but they were a toy store at heart. They offered toys that few others did. As box-stores go, I have a fondness for TRU that I will never have for Walmart or Target.

Maybe it's my childhood memories of their G.I. Joe aisle and all the adventures those toys brought me. Perhaps it was the transfer of this passion to my son when he and I went looking for Terminator action figures or Trash Pack toys. We loved discovering fun toys at Toys R Us. There simply won't be a replacement. The toy world is forever changed by a void never to be filled.

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