With its spacious, high-ceiling stores that hold thousands of items, Toys R Us pioneered the big-box format for toy sales and became the go-to destination for playthings and baby products — elbowing many smaller toy stores out of business. Monday night for Chapter 11 protection. But Toys R Us isn’t a simple example of invest in halo fi conventional retailer being steamrolled by consumers’ radical shift to online shopping. Its survival won’t be simple, either.
Indeed, the company’s cavernous stores showed no sign Tuesday that the merchant was in trouble. Commercial Workers union representative, outside a Toys R Us in Culver City on Tuesday. This is where I get most of the toys” for family and friends. 113 are in California, its largest U.
The company, which employs 65,000, did not announce any store closures and said it planned its normal practice of hiring thousands of additional seasonal workers for the holidays. Even before the surge of e-commerce, Toys R Us was under pressure from the likes of discount mass merchants Wal-Mart Stores Inc. As online shopping exploded in the last few years, led by e-commerce giant Amazon. Toys R Us also has a website but it has failed to be as competitive, retail experts said. 5 billion in debt, much of it stemming from 2005 when a trio of investment firms bought the company and took it private.
That constrained Toys R Us’ ability to invest further in its stores or website. With its filing under Chapter 11 of the U. Bankruptcy Code, Toys R Us remains open but is protected from creditors’ claims while it works out a court-supervised reorganization plan. 3 billion in financing needed to reassure suppliers and keep the business running. Toys R Us Chief Executive David Brandon said in a statement that “we expect that the financial constraints that have held us back will be addressed in a lasting and effective way. But analysts said the company’s survival will depend on much more than cash.
Toys R Us needs a multi-pronged strategy for improving its store experience, its website and its service while also matching rivals’ prices if it hopes to compete with Amazon and others, said Eric Schiffer, chief executive of the Patriarch Organization, a private equity firm. Having giant stores with few employees who offer little help “doesn’t cut it anymore,” Schiffer said, adding that “you need to hire people who are oriented about toys, are passionate and well-educated about the products. He and others pointed to Best Buy Co. Amazon and elsewhere online, speeding up shipping times and by bolstering its floor staff with knowledgeable employees. Brandon Channels, another shopper at the Culver City store, said, “I shop here all of the time for things like ‘Star Wars’ items and DC superheroes and Marvel” and that he would be “very disappointed if they don’t survive.
26 I’m not going to buy it here. The company’s filing came in U. Bankruptcy Court for the Eastern District of Virginia in Richmond. Toys R Us said its Canadian unit also intended to seek reorganization in the bankruptcy court in Ontario. Toys R Us has 259 licensed stores outside of the United States and Canada that it said are not part of the reorganizations.
The retailer’s CEO, in a conference call with analysts in June, said there was “very, very aggressive pricing online” that was causing the chain problems. He also noted that Amazon, Wal-Mart and other online vendors were offering free shipping in many situations and that two-day shipping was becoming commonplace, resulting in “a very difficult quarter” for Toys R Us. A sales slowdown at Lego Group, one of the leading toy makers, also hurt the toy seller. Toys R Us was “seeing significant weakness in demand for their products globally,” Brandon said in June. Lego said it would keep working with Toys R Us during its bankruptcy “to ensure an optimal solution is reached” for continued Lego sales and “balancing our commitment to them while responsibly managing our business. Play-Doh and Transformers and My Little Pony toys, said it was declining to comment while it’s “in the process of evaluating the terms of the Toys R Us bankruptcy filing and until we have a full understanding of the terms and their impact to Hasbro.