Toy ‘R’ Us Fate Unknown; 2 Takes on Their Future

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Source: Getty Images

By Kristin Kingi

The toy industry’s direction is changing dramatically. Toys R Us, a major toy retailer, filed for Chapter 11 bankruptcy protection in 2017. The popular store that reached massive prosperity throughout the 90’s and 200’s stated having 5 billion dollars in debt. Having this player out of the game would change the toy industry entirely. The fate of the company lies in the hands of one man. Isaac Larian who has offered to buy out locations in both the US and Canada. According to Business Insider, the cause of the Toys R Us stores closings was first speculated to stem from Amazon, a retail giant, but more factored in as well. The company had enormous debt after becoming private in 2005, from which it never recovered. The chain also expanded rapidly in the 1990’s era, which made making up for the massive profit loss a difficult task. Walmart, another competitor for the company, began selling more toys than Toys R Us, which contributed to the overall damage to the company. Overall, these factors contributed to the company filing for liquidity, forcing it to sell or close the remaining stores.

While Toys R Us seemed doomed for industry death, there is a new hope. The CEO of MGA Entertainment placed a formal offer of $890 million to buy 274 locations of the Toys R Us stores. Larian, known for bringing the famous Bratz dolls to the market, wants to revive the chain. The popular stores filing bankruptcy and foreclosing of all locations have struck a chord with both industry leaders such as Larian and consumers. The formal offer of $675 million would save thousands of jobs within the United States. According to a press release, Larian will use his own money for the bid, as well as financing from banks and other investors. With this offer, Larian plans to rejuvenate the Toys R Us brand, “We will make Toys R Us an experience in and of itself; a fun and engaging place where families can spend an entire day” (CNN, 2018). Changing the business model of the brand would bring a new life to the brand; rejuvenating the stores while keeping the nostalgic aesthetic consumers express their passion about. The efforts to save Toys R Us are also supported by consumers who have strong feelings of nostalgia and fond memories to the brand, many of which have donated to the Go Fund Me campaign set up by Larian himself. His efforts to save Toys R Us go beyond the factor of nostalgia. Without the nationwide locations, there could be colossal damage to Larian’s business. These losses for MGA Entertainment would cause the industry in the long-term to “truly suffer”.

With strong motivations to save Toys R Us coming from both Larian and consumers, the company might live to see another day. New generations are passionate for the Toys R Us experience, says Larian, and his efforts to keep the store alive reflect a bold business investment. The cultural impact of the store reignites with consumers, who share his passion to keep the company alive, and better the experience for families.

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