ToysRUs UK & US bankruptcy & closure

[techx]

Came across this piece of news

https://www.nst.com.my/business/2017/09/280954/toys-r-us-prepares-possible-bankruptcy-filing#cxrecs_s



Your take on this fellow forumers

[griffin]

TRU in America seems to be a corporation that loves to use the bankruptcy laws to deal with their debts, as they've done this before... which lead to a restructure and closing down of some stores in America (and converting a lot of them to purely BabiesRUs stores, which was more profitable to them).
It shouldn't affect us here though, as our own success or failure will determine its future here.... as can be seen by the recent opening of several stores (and plans to open more at some of the old Masters Hardware locations), after almost 2 decades of stagnation and closing down of some stores here.
Their prices and product distribution polices are still outdated and work against them, but it seems that the current model is working "enough" for them to stick with it and be able to risk opening more stores.

[GoktimusPrime]

It's silly how TRU only seem to focus on surviving rather than thriving.

[drifand]

Partial fault lies between bringing in toys for older kids such as adults is lacking. The range of toys are limited, and to me a toy store that sells toys needs to be bigger than average BigW etc....

I was in US 5 years ago and their Toyrus didn't feel big nor wowed me.

Very sad, we got a company going under, but we have crap business retailer not going under

[G1Optimal]

Toys r us files for voluntary chapter 11 bankruptcy
http://news.tfw2005.com/2017/09/19/toys-r-us-files-voluntary-chapter-11-petitions-u-s-349225

[DELTAprime]

It's silly how TRU only seem to focus on surviving rather than thriving.

Amazon.com is killing them, and most other retail in the US. TRU's days in the US are numbered and they are one of many in the same situation.

When 64% of the US population has Amazon Prime which gives them free 2 day shipping on top of Amazon's low prices there's little chance for other retailers.

[griffin]

(disclaimer - I'm not an accountant, or have any training/qualifications on this)... but this shouldn't directly affect ToysRUs in other countries like here... and bankruptcy (protection) in America is something businesses over there appear to be able to do as a way to keep operating, because they believe they have profit potential beyond some short-term debts that are due soon. (even the billionaire Trump has had his businesses go through bankruptcy at least three times in the past, to deal with some debts, without losing everything).
I think we'd only need to worry if the US business goes into administration or have their creditors/investors find out that they have long term forecasts of zero profit potential, and petition to have the business sold off or shut down (if the debts outweigh its assets).
And even if that worst case scenario happens, I just couldn't imagine them shutting down their businesses in all those other countries they are in, who are obviously still profitable, or else the US business would have shut them down by now.

From the press release...


The Company’s operations outside of the U.S. and Canada, including its approximately 255 licensed stores and joint venture partnership in Asia, which are separate entities, are not part of the Chapter 11 filing and CCAA proceedings.
The Company’s approximately 1,600 Toys“R”Us and Babies“R”Us stores around the world – the vast majority of which are profitable – are continuing to operate as usual,

The downside though, is it will probably mean no more TRU exclusives from Hasbro during this time, as TRU are likely to trim down their inventory... and are prioritising their investor debts over their supplier debts (leading to some suppliers cutting back on sending new product until they pay for what they have already received (https://www.seibertron.com/transformers/news/several-suppliers-cutting-shipments-to-toysrus-but-hasbro-is-not-one-of-them/39586/) - suppliers can often allow up to 90 days for payment, particularly for their bigger customers).

I think a wait-and-see approach is best for this situation... and my fingers are firmly crossed that this doesn't lead to a full collapse of the global franchise, because aside from their high prices, TRU here are the best at price-matching of all our toy retailers (and personally - the Ocean Terminal TRU in Hong Kong, is in my opinion, the best toy store in the world for current Transformers toys, and if it shut down, it would be a big loss on my future trips over there)

[DELTAprime]

^ I never realised TRU licensed their name out for foreign companies to use. I wonder who owns the Australian stores?

[griffin]

^ I never realised TRU licensed their name out for foreign companies to use. I wonder who owns the Australian stores?

It is hard to tell, but the bottom of the ToyRUs page (https://www.toysrus.com.au/) has a link to ToysRUsInc (the American corporation that owns TRU and BRU), and its T&Cs mention that TRU Australia Pty Ltd uses the various trademarks "under license"... so I think that without any other business name being mentioned anywhere, it would probably be the US company who registered and set up the business here, like Hasbro Australia and other multinationals originally from America.
In other words, it is its own business entity here with Australian managers and employees, but most of the policies and procedures would come from America... and the profits flow back to there.

From what I can tell from here (https://en.wikipedia.org/wiki/Toys_%22R%22_Us), TRU Singapore and Japan are licensed to 3rd party companies... and only about 20% of their international stores are licensed, so they must have direct control over most of them.
(it also notes that the US business is no longer a publicly listed company - a consortium spent US$6.6 Billion in 2005 to buy out the business from shareholders... and it is probably the repayment of this debt that has them in trouble, with them still owing half of it back to the banks)

[GoktimusPrime]

Brick and mortar retailers cannot ever compete with online stores for price for obvious reasons. But there are still some things that real stores can offer that online stores can't. These include:

* Good personal customer service. When you shop online you're dealing with a machine, but when you shop IRL you're dealing with a human being. Simple things like giving a crap about your job and treating your customers well go a long way in making the shopping experience enjoyable. These are things that online stores can never match. Anyone who's ever been to Japan will know what a pleasure it is to shop there because the customer service is so top class. It makes you want to go back to that shop again. Simple things like talking with the customer - starting a quick conversation or having a sense of humour etc.
e.g. when I bought #1 of the Definitive G1 Collection from a newsagent, the guy who served me scanned the book and said in a deadpan tone of voice, "That'll be $30 million." and as I tapped my card I said, "Now to run away before my card gets declined!" and we both had a good chuckle. :D Just today I bought Wonder Woman on DVD and the lady serving me said that she noticed that this was a popular item and was wondering why - so we had a brief chat about why I think it's a good film which piqued her interest. Ya know... human interaction!
Just have some passion and pride in your work... (-_-)

https://image.ibb.co/i3PLEQ/temp.jpg

* Immediate sale (and ownership!). 2 day shipping may be 2 day shipping, but with real shopping I can own that toy immediately. Two days? Ain't nobody got time for that! :p Part of this also means ensuring that the stores have actual stock because obviously if they don't stock the toys we want then we have no other choice than to shop online. I will always choose real life shopping over online shopping when possible, but if I can't find that toy in stores or if I'm unsure if the toy will even show up locally, then I'll get it online. e.g. TR Seaspray and TLK Deluxe Sqweeks - both recent online purchases for me because I still haven't found them in stores. I want Deluxe Cogman too and I keep finding the One Step Changer.

https://image.ibb.co/fTNXuQ/temporary_2.jpg

* Ease of exchange/refund.

[DELTAprime]

^ Amazon calls it 2 day shipping but in many cases you can receive your item is as little as a couple of hours. In a city like San Francisco, LA or New York where it's already inconvenient to go to a shopping centre a couple of hours for it to show up on your doorstep for free is a much better deal.

Also they have exchanges and refunds worked out. There are many customers that will buy say 3 pairs of shoes, figure out which one pair they actually want and return the other two because Amazon has made it so easy to do refunds and exchanges.

Amazon has put dozens of entire shopping centres in America out of business, TRU is just another victim.

[GoktimusPrime]

Amazon Japan does the same thing, but they still have retail businesses because their brick and mortar stores are still offering something that online stores can never match - good quality customer service. The thing that sometimes irritates me about shopping in Australia is when I encounter poor or just apathetic customer service. Like when I speak with staff they are often abrupt and inhospitably dismissive. When you shop in Japan you're treated very well and it's a pleasurable experience that makes you want to shop again in the future.

[Gouki]

Whatever. Don't care. Never got the nostalgia for Toys R Us other people have. They really have no one but their own arrogance to blame for this.

[BigTransformerTrev]

Considering the way I've been F'ed over by both the Aussie and US TRU online stores this news doesn't shock me - both their online sales practices and customer service is woeful to say the least. Chooks coming home to roost as far as I'm concerned.

Maybe if they actually listened to complaints and tried to rectify their practices so they didn't keep making the same idiotic mistakes, customers might not have flocked elsewhere :rolleyes:

[griffin]

This article has some interesting info and stats about the US ToysRUs (https://www.bloomberg.com/news/articles/2017-09-20/toys-r-us-lives-on-because-mattel-and-hasbro-can-t-let-it-die).

- their remaining debt of US$5 billion had debt repayments of US$400 million per year.
- they generated US$11.5 billion in sales last year and their annual profits were increasing for the last three years, only just getting above the debt repayment amount in the last financial year with a profit of US$460 million.
- so why file for bankruptcy if they were heading in the right direction?... 40% of their suppliers stopped giving them credit, and started demanding payment on delivery, just before the Christmas period, which accounts for 40% of their annual sales.
- bankruptcy protection now allows TRU to buy more stock from the money that would have been used to pay their debts, allowing them to keep making profits that encourage other sources to invest to cover their debt (it seems that they already have US$3 Billion raised).
- the bigger toy companies like Hasbro, Mattel, and MGM need TRU so much that they will be providing more help with exclusives (and probably cheaper prices to improve their margins), which will also help reassure investors to help keep TRU alive.
- TRU in America accounts for 11% of Hasbro's sales and 9% of Mattel's sales, second only to Walmart, so they need TRU to survive or risk losing hundreds of millions in revenue.
- their debt agreements prevent it from shutting down stores in America, so people there shouldn't be worried about their nearest store disappearing at this time.

[DELTAprime]

It should be noted that there are two forms of bankruptcy in America for companies. Chapter 11 and Chapter 7. Chapter 11 forces your creditors to renegotiate with you to keep you in business, but this doesn't always work and sometimes it goes to the next level. Chapter 7 is what we think of bankruptcy which is the company is gone, it comes after Chapter 11. Both Chapter 11 and 7 are bad, but 11 isn't as bad.

Since according to that article they are forced to not close stores under their current agreement I bet that is one thing they will change in their new agreement if Chapter 11 succeeds, which it doesn't always. If they can't close stores that would mean if there are a few store running at a huge loss dragging down their profits then they wouldn't be able to do the right business decision and shut them.

I still think retail is doomed.

[DELTAprime]

Terrible news for workers at 180 TRU stores in America with 180 stores closing.

https://www.seibertron.com/transformers/news/list-of-180-us-toysrus-stores-closing-in-2018/40543/

On the bright side for US toy shoppers they are liquidating $200m in stock, so bargain time if you're in the US.

https://www.seibertron.com/transformers/news/toysrus-to-liquidate-over-200-million-in-merchandise-and-more-insider-details/40545/

[griffin]

It's a lot of stores, but that still leaves about 89% open, which could have been necessary to offload sluggish stores to keep the other 1420 stores open.

I wonder if I've been to any of the ones that are closing... meh, it'll take too long to look it up. :p

[griffin]

The UK situation has deteriorated (http://news.tfw2005.com/2018/02/28/fall-toys-r-us-uk-branch-enters-administration-360172), to the point of entering Administration... which means that someone unrelated to the business comes in and sees if it is best to salvage the business or to see if it needs to be closed up and get as much of its debts paid off as possible.
Since their issue is unrelated to the US problem, this collapse is just coincidental timing, and shouldn't have any affect on ToysRUs branches in other countries (like ours or in Asian countries).

[BigTransformerTrev]

The UK situation has deteriorated (http://news.tfw2005.com/2018/02/28/fall-toys-r-us-uk-branch-enters-administration-360172), to the point of entering Administration... which means that someone unrelated to the business comes in and sees if it is best to salvage the business or to see if it needs to be closed up and get as much of its debts paid off as possible.
Since their issue is unrelated to the US problem, this collapse is just coincidental timing, and shouldn't have any affect on ToysRUs branches in other countries (like ours or in Asian countries).

It's a shame about the UK branch. I've had (to me anyway) significant issues with the US and Aus branches but I have fond memories of the TRU's in the UK. I got my Reissue PM Prime & Hot Rod, RID(01) Bludgeon & Scourge as well as Armada Unicron from them when living there - fond memories indeed :)

[griffin]

Looks like the US ToysRUs situation took a turn for the worst, going from a rather safe position of bankruptcy protection, to having the lenders now pushing the business to liquidate all stores and assets just to get back what they are owed, because they can't find new lenders or purchasers.

The optimistic option was to close 20% of their stores and find new creditors to keep the debt active and paid off.... but on Monday (US time), there will be a bankruptcy hearing held (https://www.seibertron.com/transformers/news/toys-r-us-debating-whether-or-not-it-will-close-all-of-its-us-store-locations/40849/), that could see the decision made by ToysRUs to completely dissolve their business.
If that happens, that would likely be the end of ToysRUs exclusives, even in other countries, as the US organises them, and then makes them available to ToysRUs entities in other countries.
And it sounds like ToysRUs in quite a few countries are struggling or on the verge of collapse (http://news.tfw2005.com/2018/03/08/playtime-toys-r-us-usa-preparing-complete-shutdown-360716), with the Canadian branch also in bankruptcy since last year, the UK branch closing quite a few stores, the European branch looking for a buyer, and apparently the Asian branch is already in the process of being bought out.

With ToysRUs in Australia actually in the process of expanding at the moment, we may end up being the last branch of that brand in the world.

[DELTAprime]

As much as it would suck for customers I'm thinking more about the employees. That's going to be a lot of people having to look for a new job with little warning. Retail in America is dying rapidly unfortunately.

If it wasn't for their loan providers I think TRU would be in a much better state.

At least for us here in Australia most of retail is doing well with malls all over the country renovating to add more stores. Sure we get the headlines all the time of Jerry Harvey saying how online is killing him, but with more stores opening fairly regularly I think for the time being retail is doing well here.

[1AZRAEL1]

I feel for the workers more than customers. It's crap.

Hopefully I get my Grotusque

[GoktimusPrime]

Soon to be known as Toys Were Us. :p

[Trent]

As much as it would suck for customers I'm thinking more about the employees. That's going to be a lot of people having to look for a new job with little warning. Retail in America is dying rapidly unfortunately.

If it wasn't for their loan providers I think TRU would be in a much better state.

At least for us here in Australia most of retail is doing well with malls all over the country renovating to add more stores. Sure we get the headlines all the time of Jerry Harvey saying how online is killing him, but with more stores opening fairly regularly I think for the time being retail is doing well here.

Retail here would want to be doing well after scrapping penalty rates.

[griffin]

Okay, this post is getting us off-topic, but they didn't "scrap" penalty rates... we still have penalty rates for weekends and after-hours on weekdays.

The Sunday rate was brought into line with Saturday, because we aren't a majority Christian country anymore (less than 11% attend church on a regular or irregular basis now)... and the higher rate was for businesses to pay employees more for missing their obligation to attend church services (when these higher Sunday rates were first brought in). Just like how businesses and retailers were not allowed to operate on Sundays... those archaic laws were drawn up by rather non-secular governments last century, and as trading hours on Sundays have been slowly relaxed to be close or equal to Saturday in various cities around the country, it was only a matter of time that the pay rates would reflect that change as well.

So there is no longer a logical reason why one day of the weekend is more important than the other, to have it paid more than the other.
After all, is it fair to have people doing a particular job on Saturday earn less than people doing the exact same job on Sunday.

Base rates need to be higher, not the penalty rates, or else you get a large chunk of society desperately dependant on the higher paid, odd-hour work just to be able to afford to raise a family that they now have to miss seeing most of the time working those shifts.

Higher Base rates and lower costs of living... should be the focus of politicians, not fighting over penalty rates (which are only a percentage of the base rate anyway, so if it doesn't go up, the penalty rate doesn't go up either).

[Trent]

Okay, this post is getting us off-topic, but they didn't "scrap" penalty rates... we still have penalty rates for weekends and after-hours on weekdays.

The Sunday rate was brought into line with Saturday, because we aren't a majority Christian country anymore (less than 11% attend church on a regular or irregular basis now)... and the higher rate was for businesses to pay employees more for missing their obligation to attend church services (when these higher Sunday rates were first brought in). Just like how businesses and retailers were not allowed to operate on Sundays... those archaic laws were drawn up by rather non-secular governments last century, and as trading hours on Sundays have been slowly relaxed to be close or equal to Saturday in various cities around the country, it was only a matter of time that the pay rates would reflect that change as well.

So there is no longer a logical reason why one day of the weekend is more important than the other, to have it paid more than the other.
After all, is it fair to have people doing a particular job on Saturday earn less than people doing the exact same job on Sunday.

Base rates need to be higher, not the penalty rates, or else you get a large chunk of society desperately dependant on the higher paid, odd-hour work just to be able to afford to raise a family that they now have to miss seeing most of the time working those shifts.

Higher Base rates and lower costs of living... should be the focus of politicians, not fighting over penalty rates (which are only a percentage of the base rate anyway, so if it doesn't go up, the penalty rate doesn't go up either).

Having family members directly impacted by this change, I could debate with you at length about how your Christian arguement is moot. But as you said, wrong topic.

[DELTAprime]

TRU ain't dead yet... The hearing is postponed. Plus an update on TRU Canada.
https://www.seibertron.com/transformers/news/decision-for-toys-r-us-postponed-and-new-statement-from-toys-r-us-canada/40873/

[DELTAprime]

And that's it folks, TRU in both the US and UK are closing down completely.

https://www.seibertron.com/transformers/news/toys-r-us-closing-all-us-stores/40888/

https://www.seibertron.com/transformers/news/all-toys-r-us-stores-are-expected-to-close-within-6-weeks-in-the-uk/40886/

[Thurmus]

And most likely Australia as well.

http://www.news.com.au/finance/business/retail/were-putting-a-for-sale-sign-on-everything-toys-r-us-to-shut-down-all-us-stores/news-story/efe53f03b70229ccbb57a5427cc81a20

[griffin]

It is sad... I've bought a lot of toys from TRU in America, and would feel worse if botcon was still happening. TRU was always a priority, with Walmart And Target when I was in America, and it would be a factor in deciding hotels when not at the convention. There is even one near the LA Airport that I had checked out several times before or after a flight, and once between two connecting flights (taxi there and back, with the driver waiting for me).
I think we'll miss the exclusives most though. There might not have been a lot, or cheap, but it was the store with the most despite Walmart and Amazon being bigger.

[Ralph Wiggum]

I wonder if future kids will ever experience that feeling of walking into a huge store filled with toys.

[griffin]

I wonder if future kids will ever experience that feeling of walking into a huge store filled with toys.

That is true... with the loss of Kaybee Toys 10-ish years ago, and now ToysRUs, American kids don't have a chain of stores that are exclusively toys anymore.
As bad as we might say ToysRUs and Toyworld are with their prices or product range, we still love to go to those stores because it is mostly just toys. A feeling you don't get with Target, BigW, Kmart or Walmart, no matter how big the store is.

[DELTAprime]

One thing we need to be mindful of is in the liquidation of any company you have done business with, so TRU US and potentially AU for me in this case, there is the possibility of your customer data ending up in someone else's hands at which point they can use it however they want.

Fortunately TRU doesn't have any of our personal devices in its possession. In the recent bankruptcy auction of NCIX you can see people's personal computers that are being auctioned off. In a video that's behind a paywall we find out that the Nvidia Shield that Linus buys in the second video has the owners personal accounts still logged in and he could have charged the users credit card for content on the device or even stolen the owners accounts entirely.

https://www.youtube.com/watch?v=29LL3blOxds

https://www.youtube.com/watch?v=cDZfh5IjGv8

[Handsprime]

It seems that Toys R Us Australia aren't going anywhere soon, at least according to [their FB response.](https://www.facebook.com/toysrusau/photos/a.109246045832232.18209.107753695981467/1681165738640247/?type=3&theater)

[Gouki]

It's terrible those people will lose jobs, but, frankly, from a consumer perspective? Good riddance to bad over prices rubbish.

[Galvatran]

It seems that Toys R Us Australia aren't going anywhere soon, at least according to [their FB response.](https://www.facebook.com/toysrusau/photos/a.109246045832232.18209.107753695981467/1681165738640247/?type=3&theater)
Doesn't fill me with confidence.

[Jellico]

It showed up in the media today. Two views

Business as usual
http://www.abc.net.au/news/2018-03-15/toys-r-us-australia-says-it-is-business-as-usual/9552844


And good for Westfarmers
http://www.afr.com/business/retail/woolworths-and-wesfarmers-to-benefit-from-toys-r-us-demise-20180315-h0xid5


The big one I took from the AFR page.

"US chief executive, David Brandon, was quoted overnight saying the Australian operations and those in France, Spain and Poland were likely to go into liquidation."

[M-bot]

Doesn't fill me with confidence.

Yeah, “working through a range of options” is not inspiring. Wouldn’t be buying any gift vouchers anytime soon.

[DELTAprime]

Yeah, “working through a range of options” is not inspiring. Wouldn’t be buying any gift vouchers anytime soon.

What about those people that preordered the MP Cheetor repaint, they will likely never get the product they paid for.

Also read the update on Seibertron, Australia is specifically called out as being liquidated.

https://www.seibertron.com/transformers/news/toys-r-us-closing-all-us-stores-other-countries-likely-affected-update/40888/

[DELTAprime]

We're already discussing the situation in this thread.

http://www.otca.com.au/boards/showthread.php?t=24757

Probably worth bringing the existing thread up to the news section.

[MV75]

Yeah, “working through a range of options” is not inspiring. Wouldn’t be buying any gift vouchers anytime soon.

They're hoping for investors most likely to spin off another company using the current locations and inventory under the label is my guess.

[hYpNoS]

What about those people that preordered the MP Cheetor repaint, they will likely never get the product they paid for.


*gulp*

[Autocon]

Big closing down sales?

[Galvatran]

It seems that Toys R Us Australia aren't going anywhere soon, at least according to [their FB response.](https://www.facebook.com/toysrusau/photos/a.109246045832232.18209.107753695981467/1681165738640247/?type=3&theater)
Here is the FB post:

To our Valued Customers

While we are saddened by the news regarding our U.S. operations, in Australia we remain committed to delivering the best products, services and experiences possible to the many Toys"R"Us kids who have supported our business throughout the past 25 years.

We are working through a range of options for our business locally and as always will relentlessly strive towards bringing fun, joy and happiness to the hearts and minds of our customers for many more years to come.

Our stores remain open and our amazing staff are ready to serve you!
Our Gift Cards, VIP club points, Layby, returns policy and other services remain unchanged, however if you have any worries at all please reach out to our customer service team for more information.




What about those people that preordered the MP Cheetor repaint, they will likely never get the product they paid for.
I say we shoot the messenger who first posted the preorder news on this forum. I prefer a lynching myself. *picks up a pitchfork & fire torch*

[DaptoDog]

The US CEO says Australia will be liquidated. The Australian business lost $8m last year and more than $100m over the last 7 years. It's accounts say that it relies on the financial support of its US parent. Without that it's most likely gone. I wouldn't be buying anything on lay-by or pre-order, nor gift cards. If you have gift cards use them.

[1AZRAEL1]

The CEO says likely, doesn't say will. I'll wait until they pull the plug

[Galvatran]

The CEO says likely, doesn't say will. I'll wait until they pull the plug
That's akin to a club CEO saying "I have full confidence in the Head Coach. His/Her position is safe".

And we all know what happens next.

[Other]

Big closing down sales?

That never happens, what will happen is that some larger vendors like Lego will take stock back rather than see it price slashed while new, other stock will be sold to stores like Toyworld, and the remander no one wants will be sold at full price and the prices slowly slashed andl by the time the actual discounts arrive there will nothing but the dregs that no one wanted left filling one quarter of a roped off store.

[reillyd]

Unemployment is bad, I feels for the workers.

But Toys R Us is such a big part of the toy industry we all love.... and exclusives that would never have been made and found an outlet elsewhere came into being because of TRU. Whole toylines that in Australia would never been carried (Marvel Legnds/Universe, GI Joe) could only be found there. Transformers will be fine, but smaller properties are going to get hurt.

I really hope a buyer steps up (and is just biding their time for the optimum price). I can't see Hasbro or Mattel being allowed to buy in with anti-trust legislation..... but hey, we have Trump so maybe it doesn't matter now.

[MV75]

https://www.washingtonpost.com/news/business/wp/2018/03/14/toys-r-us-to-close-all-800-of-its-u-s-stores/?utm_term=.e69af01ba630

Toy manufacturer plans to bid on Canada and possibly further US operations.

Toy companies are indeed the ones that need to buy this for their retail arm. Also they should stop selling at Walmart and target. Most likely if they get their own outlets I suppose.

[griffin]

After I was just talking about Kaybee toys in one of my last posts in this topic, it sounds like the company that bought the name after that company collapsed in 2009, has been planning to start up a national chain of toy stores for a little while now, but has now had to accelerate their plans in response to the collapse of ToysRUs... and will try to open up their first wave of stores by this Christmas (http://news.tfw2005.com/2018/03/18/light-darkest-hour-kb-toys-reopen-360985).

Kaybee in America was like Toyworld here - the prices weren't very competitive, and you could find really old stock collecting dust in there, while they were small dedicated toy stores that you could find all over the country... until ToysRUs came along and totally destroyed them (that hasn't happened to Toyworld, but a lot of stores did close down when ToysRUs first arrived).
This version of Kaybee (or KB) is not likely to be anything like the old version, and now that they are looking to fill the void left behind by ToysRUs, we could see large sized stores, like ToysRUs... but more profitably set up.

I really hope this happens, as toy manufacturers like Hasbro would be able to sign up a new retailer for exclusives that would have otherwise gone to ToysRUs.
In America, the Machine Wars toys were exclusive to Kaybee.... and I ended up buying a number of Beast Machines toys at Kaybee during a couple of BotCons, because they were sitting there unsold a couple years after their release.

[Omega Metro]

There’s a KB Toys in Sydney apparently. It has something to do with Nicole’s Toys from EBay as I buy a lot from there and the parcels always have KBtoys.com.au taped all over it.

[bowspearer]

Interesting article from Business Insider: https://www.businessinsider.com.au/toys-r-us-closes-millennials-babies-birth-rate-2018-3?r=US&IR=T

[Trent]

Interesting article from Business Insider: https://www.businessinsider.com.au/toys-r-us-closes-millennials-babies-birth-rate-2018-3?r=US&IR=T

Ofcourse. Everything else is our fault so why not The closure of TRU :rolleyes:

I can't have kids! I'm too busy eating my smashed avocado on fancy toast!

[MV75]

Ofcourse. Everything else is our fault so why not The closure of TRU :rolleyes:

I can't have kids! I'm too busy eating my smashed avocado on fancy toast!

That's ok, I blame millennials for the current woes of the world anyway.

Just another fluff piece that fails to address the lack of adaptation for the actual toy buying demographic by the stores.

[bowspearer]

Ofcourse. Everything else is our fault so why not The closure of TRU :rolleyes:

I can't have kids! I'm too busy eating my smashed avocado on fancy toast!

And yet you can't deny it is a factor. Population growth in the Western world is at a serious low right across the board - of course that's going to affect the primary demographic of the toy market for all companies and all properties when there are less kids compared to, say, a generation ago. Why does stating a simple matter of fact like that offend you so much?


Just another fluff piece that fails to address the lack of adaptation for the actual toy buying demographic by the stores.

Certainly that's a factor, but I think the article has hit this on the head. Even if you factor in the lack of adult collector focused figures in parts, unexplored avenues of nostalgia cash-cowing and the way these very chains have decided on some very non-collector friendly case assortments, you're still only talking about what last I checked, was only a maximum of 30% of your entire consumer base.

The fact is that unless you're really terrible at maximising your returns with that demographic, no matter how much you make the most of that 30%, losing kids means you've still lost 70% of that demographic.

While it might be nice to think otherwise, there's no way that adult collectors form a large enough group to carry the toy industry at its current size if it ever came down to it.

[Raider]

And yet you can't deny it is a factor. Population growth in the Western world is at a serious low right across the board - of course that's going to affect the primary demographic of the toy market for all companies and all properties when there are less kids compared to, say, a generation ago. Why does stating a simple matter of fact like that offend you so much?




The problem with the article, as far as I am concerned, is not the point about the decrease in birth rate hurting the industry, but rather what appears to be an attempt to attribute blame to millennials as well as women. The article starts off, not be merely point out declining birth rates, but by specifically mentioning millennials being the cause for this.

Why not go a step behind and argue that the reason millennials don't have as many kids is that we are all working our back sides off to get jobs and hopefully one day have enough of a deposit to buy a house but in the mean time pay huge rents to baby boomers. So, if baby boomers stopped being greedy and accumulating more wealth and taking up more costs through welfare, then millennials would have more time and less stress and could have more kids.

I am not saying that I agree entirely with what I have just said, I am just pointing out the bias underpinning that writer's article.

[Ode to a Grasshopper]

^^^ It does seem a little bit like that whole 'Why aren't millennials buying diamonds?' (http://www.huffingtonpost.ca/2016/07/06/millennials-diamonds-the-economist_n_10838174.html) thing from a year or two back.

[Tetsuwan Convoy]

And yet you can't deny it is a factor. Population growth in the Western world is at a serious low right across the board - of course that's going to affect the primary demographic of the toy market for all companies and all properties when there are less kids compared to, say, a generation ago. Why does stating a simple matter of fact like that offend you so much?

I disagree here, I solely place the blame on the baby boomers for having so many kiddies to blow the population out in the first place.

Also on a non jokey note, (yes, above was a joke before knickers get in a not), after just skimming through the first 3 or so paragraphs of the article, if TRU's sole business plan was based on population growth and they don't have a strategy if population growth declines, then they are a very stupid company.

What a trashy article

[bowspearer]

The problem with the article, as far as I am concerned, is not the point about the decrease in birth rate hurting the industry, but rather what appears to be an attempt to attribute blame to millennials as well as women. The article starts off, not be merely point out declining birth rates, but by specifically mentioning millennials being the cause for this.

The problem is that if you're going to talk about declining birth rates, it's millenials who are currently in the age bracket who are responsible for producing most of the kids in society - with xennials taking up the tail end of that. Gen X at this point are in their mid-late 40s or older so their child-rearing age bracket days are well and truly coming to a close. Meanwhile Gen Z are really only starting to form the front end of that child-rearing age bracket. They're specifically mentioning millenials, because it is millenials who are the ones who, if birth rates were higher, would be rearing and raising the majority of kids in society. When birthrates aren't happening, it's because we're not having kids.

Likewise, many women are putting off kids til much later in life (in fact you're starting to see the odd regret story about women who missed the window and now regret it), which likewise is going to lower the numbers of women who aren't having kids.

No matter which way you slice it, those are the reasons kids aren't here.


Why not go a step behind and argue that the reason millennials don't have as many kids is that we are all working our back sides off to get jobs and hopefully one day have enough of a deposit to buy a house but in the mean time pay huge rents to baby boomers.

Because the article is about "What is a major reason Toys'R'Us is citing for loss of business?" not "Why aren't millenials having children at the same rate of previous generations?"

Is that a possible response article? Not really. The reason is that if you were going to truly look at those reasons, I'm not sure a mere article would be long enough to do an exploration of those issues justice.

[Trent]

And yet you can't deny it is a factor. Population growth in the Western world is at a serious low right across the board - of course that's going to affect the primary demographic of the toy market for all companies and all properties when there are less kids compared to, say, a generation ago. Why does stating a simple matter of fact like that offend you so much?



Certainly that's a factor, but I think the article has hit this on the head. Even if you factor in the lack of adult collector focused figures in parts, unexplored avenues of nostalgia cash-cowing and the way these very chains have decided on some very non-collector friendly case assortments, you're still only talking about what last I checked, was only a maximum of 30% of your entire consumer base.

The fact is that unless you're really terrible at maximising your returns with that demographic, no matter how much you make the most of that 30%, losing kids means you've still lost 70% of that demographic.

While it might be nice to think otherwise, there's no way that adult collectors form a large enough group to carry the toy industry at its current size if it ever came down to it.


I didn’t realise that the use of a eye roll emoticon indicated I was “offended so much”. I had, obviously very naively, assumed it meant that one was simply mimicking the rolling of ones eyes.

:rolleyes:

;)

Also, that article only “hits the nail on the head” if you fails to do the most basic of googling to discover that TRU was saddled with USD$5B in debt in a leveraged buyout in 2005. This article (https://www.bloomberg.com/news/articles/2018-03-09/toys-r-us-downfall-is-ominous-reminder-about-debt-laden-deals) explains it nicely and offers a far more considered explanation then “BLAME THE MILLENNIALS!!!!” As it states, when you are using 97% of your net profit margin every year to purely service the interest on the loans your business has, eventually that’s going to catch up with you.

On a side note, the article explains one of the things I always wondered about: Why is TRUs online shopping experience such garbage? Because they simply didn’t have the money to invest in a good online shopping system. And with the retail world changing and moving more to online, they literally couldn’t afford to keep up.

It’s a shame. I was in Shellharbour TRU today and to think that wandering into a massive shop full of toys is something that my son may not get to experience past his toddler years is a little sad.

[bowspearer]

I disagree here, I solely place the blame on the baby boomers for having so many kiddies to blow the population out in the first place.

Also on a non jokey note, (yes, above was a joke before knickers get in a not), after just skimming through the first 3 or so paragraphs of the article, if TRU's sole business plan was based on population growth and they don't have a strategy if population growth declines, then they are a very stupid company.

What a trashy article

I disagree. The trap was always going to be with a megastore, that it requires a certain customer base size to sustain itself. Plan B would literally involve downsizing stores which requires sourcing new premises, but more importantly all new fitouts in those new premises. That in and of itself can be an incredibly costly exercise, depending on what fittings you can use and what fittings you need to acquire.

It's one thing to do that with larger premises when you're expanding, like what I imagine happened as Toys'R'Us grew from its origins in 1957; it's another thing to do that when you're cutting a loss. In fact, considering that they appear to have gone down the "express" route with some of their US stores, I imagine that they looked at the widescale downsizing option a while back and decided it was just too costly.

So if you're going to say that they should have had a Plan B, practically speaking, given that there was really no way out form the megastore model if things went bad, what you're really saying is that there should have been a Plan B back in the 1980s. The question then becomes, could anyone in the early 1980s in the toy industry have been reasonably able to foresee this current population trend. On the balance of evidence back then, the fair answer would have to be, not really.

[bowspearer]

I didn’t realise that the use of a eye roll emoticon indicated I was “offended so much”. I had, obviously very naively, assumed it meant that one was simply mimicking the rolling of ones eyes.

:rolleyes:

It wasn't just the eyeroll. What you said was:


Ofcourse. Everything else is our fault so why not The closure of TRU :rolleyes:

I can't have kids! I'm too busy eating my smashed avocado on fancy toast!

Honestly, it came across as more than a little butthurt.


Also, that article only “hits the nail on the head” if you fails to do the most basic of googling to discover that TRU was saddled with USD$5B in debt in a leveraged buyout in 2005. This article (https://www.bloomberg.com/news/articles/2018-03-09/toys-r-us-downfall-is-ominous-reminder-about-debt-laden-deals) explains it nicely and offers a far more considered explanation then “BLAME THE MILLENNIALS!!!!” As it states, when you are using 97% of your net profit margin every year to purely service the interest on the loans your business has, eventually that’s going to catch up with you.

Yes the market equity firm that is responsible for shenanigans here definitely has a case to answer for, and they certainly sped things up, as evidenced by the way the same thing destroyed Dick Smith. However if anything, it only sped up an inevitable process with the way their entire market demographics have been affected by population growth or lack thereof in this case.


On a side note, the article explains one of the things I always wondered about: Why is TRUs online shopping experience such garbage? Because they simply didn’t have the money to invest in a good online shopping system. And with the retail world changing and moving more to online, they literally couldn’t afford to keep up.

You could also add the issue with poor case assortment choices they were dictating on companies like Hasbro into that mix. The problem is that in terms of who they mostly affect, those are secondary drivers, due to the fact that as much as we wish otherwise, adult collectors are simply a smaller to medium minority of their market share.

Yes you might get the odd parent doing a quick online shop for their kids, but most of the people using online are generally going to be adult collectors buying for themselves. You see this by the fact that Christmas layby sale days here and massive sale days over there still have queues running for miles with people shopping in person in a bricks and mortar store.

Let's say they'd fixed their online service. Let's even say that they altered their case assortments to be more collector and troop builder friendly rather than aimed at 5 year olds all wanting a Luke Skywalker, a Darth Vader, an Optimus Prime or a Megatron. I'm not convinced that if you did optimise that business plan to make every cent possible from your collector base, that it would have been enough to stave off Toys'R'Us' death spiral. As a megastore, they simply were too big to survive from that small a clientele.

Case in point; comic shops and adult collectible stores like zing tend to do very well, as do the likes of EB Games. The difference there though is that they're small stores, with small sized real estate and therefore much smaller overheads, so they're able to survive with much smaller customer bases. It's a flexibility which the megastore model simply doesn't have.

[Jellico]

You needed the mega store in the 80s/90s. Look what happened to the small stores. Mega stores are still a great way to sell. See Bunnings. But there are a lot more people renovating with specialist equipment that you can't get a Kmart than buying specialist toys.

[bowspearer]

You needed the mega store in the 80s/90s. Look what happened to the small stores.

Which only goes to show just how unfeasible any kind of Plan B truly was.

[Tetsuwan Convoy]

what you're really saying is that there should have been a Plan B back in the 1980s. The question then becomes, could anyone in the early 1980s in the toy industry have been reasonably able to foresee this current population trend.

That's exactly what I'm saying. If TRU only have one plan of how to expand, then they're idiots.

Anyhoo, lack of kids to sell to was probably the least of their problems. From what I've read, the debt they got saddled with and other aspect (not related to low sales, but having to pay obligations hand over fist to others in the first palce is what more likely did the trick.

Regardless, of all that, I thought I made it pretty obvious of the joking nature of my post.

I'll be off now thanks. Later guys

[Polursine]

So, TRU Kotara (one of like 3 in the Hunter/Newcastle Region) has been undergoing major renovations (along with Kmart and JBHifi) at a local shopping center, with plans to reopen in late 2018. Will be interesting to see how this affects their plans. Maybe a candle lit vigil in the near future?

[griffin]

The UK and US ToysRUs companies failed due to issues that were not related to sales (so demographic changes are moot points).
The US company collapsed due to the people who bought the company, not doing their homework and over-valuing the it, so borrowed more than they could pay back in a short period of time. The sales were actually improving over the last couple of years, with them actually making a profit last year... and then they made the stupid decision to file for bankruptcy last year thinking that it could help increase their Christmas sales if they could delay paying bills until afterwards.
That started a whole legal process that included the possibility of liquidating the company, which they didn't think would happen... or were too arrogant to think that it could happen.
They were still in a very stable financial position, adapting to the changing retail environment (and customer demographic) enough too be able to have steady increases in their sales in recent quarters and make profit last year... but that over-valuation purchase debt was something that was working against them. They were paying it off, but it was still a burden, and not something that they would be shaking any time soon.

Meanwhile, the UK operation was burdened by a different debt, relating to their leasing costs blowing out as the land values outpaced their sales rates.

Demographic changes are real, and a challenge for all retailers who have to market to whatever the current trends or demographics are, but ToysRUs (particularly with their BabiesRUs branch that kept them afloat last time they went through a bad run), had adapted, and none of the various global branches were suffering from significant sales slumps or even downturn at all.

And I think that the talk about selling off Asian, European or Australian operations is because the US company has a stake in them, and if that company is being liquidated, their stake (partial or whole), has to be sold off to repay their debts. It just depends on who gets the naming rights in those countries... if they are sold with the stores and assets.
It would be like Mcdonalds collapsing in America - the Australian operation would still continue if it is profitable, but the American company would sell its stake to a new business or investor... who would want to have the name with the purchase, as much of the value of the company comes from the brand recognition.

[Ralph Wiggum]

If Toys R Us is financially wrecked because people weren’t bonking enough and walking through the doors then clearly their business model was outdated.

[Raider]

If Toys R Us is financially wrecked because people weren’t bonking enough and walking through the doors then clearly their business model was outdated.

^ 100% correct.

It is simply not the case and hence my tongue in cheek fun poking at that article above.

I don't think the Aussie stores will slump any time soon. As Griffin points out, it will come down to how they remove the US shareholdings and transfer of rights. I know every time I walk into my local TRU they are packed and I always have to line up to buy anything so their sales must be doing ok at the least.

[bowspearer]

So, TRU Kotara (one of like 3 in the Hunter/Newcastle Region) has been undergoing major renovations (along with Kmart and JBHifi) at a local shopping center, with plans to reopen in late 2018. Will be interesting to see how this affects their plans. Maybe a candle lit vigil in the near future?

I wouldn't be surprised if it were with a KB Toys sign on the front of them.


The UK and US ToysRUs companies failed due to issues that were not related to sales (so demographic changes are moot points).
The US company collapsed due to the people who bought the company, not doing their homework and over-valuing the it, so borrowed more than they could pay back in a short period of time. The sales were actually improving over the last couple of years, with them actually making a profit last year... and then they made the stupid decision to file for bankruptcy last year thinking that it could help increase their Christmas sales if they could delay paying bills until afterwards.
That started a whole legal process that included the possibility of liquidating the company, which they didn't think would happen... or were too arrogant to think that it could happen.
They were still in a very stable financial position, adapting to the changing retail environment (and customer demographic) enough too be able to have steady increases in their sales in recent quarters and make profit last year... but that over-valuation purchase debt was something that was working against them. They were paying it off, but it was still a burden, and not something that they would be shaking any time soon.

I agree that all of that accelerated the process; Dick Smith is an example of the exact same thing here. The problem I see is that the megastore model can't survive a significant drop in its customer base in the way smaller stores are (in fact smaller stores which can withstand a megastore are more likely to be in a better place in the very environment that is the death knell of the megastore).


Meanwhile, the UK operation was burdened by a different debt, relating to their leasing costs blowing out as the land values outpaced their sales rates.

That also could be said to be part of a similar issue. A smaller store, in the shrinking demographic, wouldn't have been as affected by it as a megastore and could well have weathered it far better..


Demographic changes are real, and a challenge for all retailers who have to market to whatever the current trends or demographics are, but ToysRUs (particularly with their BabiesRUs branch that kept them afloat last time they went through a bad run), had adapted, and none of the various global branches were suffering from significant sales slumps or even downturn at all.

Essentially what they did though in many cases, was halve the megastore and put half another store in the same real estate which focused on essentials

And I think that the talk about selling off Asian, European or Australian operations is because the US company has a stake in them, and if that company is being liquidated, their stake (partial or whole), has to be sold off to repay their debts. It just depends on who gets the naming rights in those countries... if they are sold with the stores and assets.
It would be like Mcdonalds collapsing in America - the Australian operation would still continue if it is profitable, but the American company would sell its stake to a new business or investor... who would want to have the name with the purchase, as much of the value of the company comes from the brand recognition.[/QUOTE]

I'm going to put this out there now - I wouldn't be surprised if by the end of the year, most of those stores get rebranded as KB Toys.


If Toys R Us is financially wrecked because people weren’t bonking enough and walking through the doors then clearly their business model was outdated.

It's arguably been outdated for over a decade, but megastores aren't the easiest things to scale down.


I know every time I walk into my local TRU they are packed and I always have to line up to buy anything so their sales must be doing ok at the least.

That depends on the store. I was in Frankston at the start of the year wandering around their store on a Friday night. While the shopping centre itself was packed, the TRU there was deserted and the shelves were poorly stocked. Likewise, I don't think I've ever seen TRU Belconnen packed on a Friday night, but the same can't be said for the Zing right next to it - which always seems to be packed with people. While certainly some stores will be doing well, clearly not all of them are.

[FatalityPitt]

There's a gofundme campaign in attempt to save Toys'r'us.

https://www.gofundme.com/helpsavetoysrus

Found out via Seibertron (https://www.seibertron.com/transformers/news/campaign-to-save-toys-r-us-stores-is-beginning-savetoysrus/40941/)

My thoughts - they should just do away with the car bumper stickers and prizes. The money to produce those bumper stickers should go towards raising the $1 billion they're trying to raise. But then again, I suppose driving around with it would help spread awareness.

Also, they're now on about $200 million.

[griffin]

I just can't see too many people donating to this, even if there were rewards... because it would be like being asked to help bail out a bank - these are big soulless corporations, and if the $800million is raised, the new owner would have only paid $200million for the billion dollar business.
(and I'm not sure how the American anti-competition laws work over there, but if this was here, it wouldn't be allowed by the government because it could lead to the toy-company owner of TRU blocking or pricing out its rivals, to better feature its own toys - think what it would be like if Pepsi bought out Coles... Coles would either stop stocking Coke products, or price them to make them unattractive to customers, leading to Coke losing almost half of its sales due to that one retailer no longer giving them fair access)

[DELTAprime]

I really don't like news sites actively pushing crowdfunding. Rebelscum has been pushing the Hasbro Jabba's Sail Barge, which frankly I think Hasbro shouldn't be crowdfunding anything as they are a profitable company. Now Seibertron is pushing this stupid attempt to save TRU.

And isn't Gofundme one of those crowdfunding platforms that charges you regardless of if the goal is reached???

[bowspearer]

I think Hasbro shouldn't be crowdfunding anything as they are a profitable company.

Having just gotten an email about it from Hasbro and having seen the thing, I completely disagree with you. They're not crowd-funding at all - they're doing a preorder-based production run on this so that they can justify production costs. In fact they explicitly state they're not taking money for it unless the 5,000 order target is reached.

The fact is that given how difficult it can be for Hasbro to avoid big Star Wars vehicles being shelfwarmers (6 inch Black Series Tie Fighter anyone), I think it's entirely valid for Hasbro to take this approach - especially as most retailers will take one look at it and immediately envisage stock they're stuck with unless they take a massive hit on it. That's not even ignoring the fact that with the exception of the USS Flagg, I can't think of a single playset Hasbro has produced that is less space friendly than this behemoth.

At 1.25m long and 43cm high, with a cost of $499, there is no way Hasbro could reasonably be expected to take a gamble on this at retail - especially in today's toy market. As such, the concept of turning to fans and saying "Hey, we want to give you guys this, but to be able to make this a reality at $x, we need y numbers of guaranteed sales. Who's interested?" is entirely reasonable.

[griffin]

The liquidation sales in the US have begun at many of the stores today (https://www.seibertron.com/transformers/news/toys-r-us-liquidation-sale-starts-friday-march-23rd-at-most-stores/40947/) (Friday the 23rd over there at the moment), with discount, conditions and exclusions signs posted up at stores.

[Tetsuwan Convoy]

Went into my closet Japanese store amd it looked loke business as usual. No lack of customers or prices down there. A few newly released transformers on the shelf as well.

[reillyd]

Having just gotten an email about it from Hasbro and having seen the thing, I completely disagree with you. They're not crowd-funding at all - they're doing a preorder-based production run on this so that they can justify production costs. In fact they explicitly state they're not taking money for it unless the 5,000 order target is reached.

.....

At 1.25m long and 43cm high, with a cost of $499, there is no way Hasbro could reasonably be expected to take a gamble on this at retail - especially in today's toy market. As such, the concept of turning to fans and saying "Hey, we want to give you guys this, but to be able to make this a reality at $x, we need y numbers of guaranteed sales. Who's interested?" is entirely reasonable.

I agree entirely, and I am hoping it will prompt interest in playsets again. Can you imagine how cool it would be to have an Ark playset, or Shockwave's lab, or hyperspace bridge. Even just an official Teletran-1, instead of 3rd party releases.

But they only seem to be offering to US/Canada, or I might have put down money on it. I hope this is fixed when/if they do crowdfunding for other properties

[bowspearer]

But they only seem to be offering to US/Canada, or I might have put down money on it. I hope this is fixed when/if they do crowdfunding for other properties

While in theory it would be great owning this outside of the US, I can understand why they did it. The sheer size of the thing makes shipping overseas by anything other than courier an impossibility. I suspect that given that this is an entirely new approach by Hasbro, they might want to get any bugs out of this run, before they throw international couriers into the mix.

The other possibility is that they might have thought, being clearly tentative here, that not enough people from overseas would be willing to fork out the courier fees to offer it.

I think one of the best things that international Star Wars fans who would have bought this can do, is complain en masse. If Hasbro sees that fans are that keen to pay courier fees, that they're angry they didn't get the option of opting in and in large enough numbers, I can't see Hasbro not playing ball. After all, there should be no conflicts with there other markets here like there are with HTS.

[griffin]

The founder of ToysRUs, Charles Lazarus, has died this week (http://www.toyhobbyretailer.com.au/news/vale-charles-lazarus-toys-r-us-founder?utm_medium=email&utm_campaign=Newsletter%20-%2028318&utm_content=Newsletter%20-%2028318+CID_a3158b79eecb348516ccc439ad7b2488&utm_source=Email%20marketing%20software&utm_term=Read%20more), aged 94.
I guess watching the collapse of the global business empire that he created was too much for him to take.

Lazarus started the first ToysRUs store in 1957, after spending 9 years selling baby furniture, and didn't step down as CEO until 1994.

[griffin]

Bad news for those still looking to get Arcee or Grotusque from the website (or were waiting for the allowance to be increased from 1 or 2 per person)... the TRU website is no longer allowing purchases, without any advance warning (http://news.tfw2005.com/2018/03/30/no-clicks-toysrus-com-shutting-361589).
(they should have had some sort of warning of the exact closing day/time, as it would have helped clear out some stock as people rushed to buy things at the last minute)

No word on where their online exclusives or regular items will be going, or how long the website will stay up with its product listings.

[1AZRAEL1]

I'm glad I managed to snag 2 Grotusque and sent to a friend in the US and get them sent over to me. Bad that they gave no advance warnings

[griffin]

It sounds like ToysRUs in America will be making back a fair bit of money from the sale of their interests in the more profitable foreign branches during their liquidation of assets (http://news.tfw2005.com/2018/04/13/potential-buyers-toys-r-us-asia-germany-austria-switzerland-362284)... so I don't known why they didn't just do this in the last year and just focus on their core US business.
They would have then just licensed out the usage of the name around the world, and have access to those stores when organising store exclusives with toy companies... and then buy back those businesses later if/when they build up their warchest of funds to splash out on expansions.

[griffin]

The first lot of sales have started (http://news.tfw2005.com/2018/04/22/smyths-toys-taking-toys-r-us-germany-austria-switzerland-362822), with the Irish/UK toy retailer Smyths, buying up the TRU stores in Germany, Austria and Switzerland.... but the articles say that Smyths are intending to use the purchase to expand their brand into Europe, which makes it sound like they are buying the existing infrastructure of the 93 stores in Europe, but will rebrand the stores to Smyths... which could well mean ToysRUs might only found in the Asian region of the world.

[griffin]

The earlier report about KB toys having an accelerated return in America, has been reinforced by an official announcement by the CEO (http://news.tfw2005.com/2018/05/09/kb-toys-ceo-ellia-kassoff-playcon-presentation-363532), that they will have to set up pop-up stores for the Christmas period this year, and then evaluate which ones to set up as permanent locations.
They plan to have 300-400 pop-up stores at the end of this year, and are aiming to have 800-900 permanent stores when they are fully (re)launched as a national toy retailer.
It probably can't come soon enough for the toy companies, who were hit hard by the collapse of ToysRUs - even Hasbro had a significant drop in sales and profits in the first quarter of this year when TRU stopped buying their stock.

[BruiseLee]

Australia also under administration now... :(

http://www.afr.com/business/retail/toys-r-us-australia-in-administration-20180521-h10d2v

[Galvatran]

Australia also under administration now... :(

http://www.afr.com/business/retail/toys-r-us-australia-in-administration-20180521-h10d2v
Need to subscribe to read the full article. Thanks AFR. :rolleyes:

[CHILENO20]

From news.com.au

http://www.news.com.au/finance/business/retail/toys-r-us-goes-into-administration-in-australia/news-story/1699b0958dbe97de1ffde6e0e53e3e90

[ChlorHex]

Sad days for Australian retail :(

It's the pricing strategy that TRU utilized that failed them... I really don't understand how they expected buyers to pay significantly more when next door at Target or Kmart you can get the same thing for less.

Man, it just sucks that we're losing TRU... another one bites the dust.

[Penetrator]

maybe toys as a stand alone store is just not profitable enough.

how many have we seen before that no longer a nationwide store?


uncle pete's, toy world, world 4 kids, now toys r us....

that just leaves toy mate left


but honestly, i think 80% of us buy online at least 80% of the time.

[BruiseLee]

maybe toys as a stand alone store is just not profitable enough.

how many have we seen before that no longer a nationwide store?


uncle pete's, toy world, world 4 kids, now toys r us....

that just leaves toy mate left


but honestly, i think 80% of us buy online at least 80% of the time.

Yep, for collectors, TRU is a place to get stuff straight away but pay an impatience tax. I do buy from them though mainly when they have 20% off or something. That being said they do miss a fair bit of the collectors market. For example, if it's for Japanese and more specialized stuff that you and most of us also get then this is not an option with local chain stores. The only TRUs which cater more broadly for collectors are in Asia but at the same time there are also more speciality toy stores there too. Will be interesting to see how TRUs go globally as it still has a strong trading brand but unsustainable business model.

[bowspearer]

Sad days for Australian retail :(

It's the pricing strategy that TRU utilized that failed them... I really don't understand how they expected buyers to pay significantly more when next door at Target or Kmart you can get the same thing for less.

Man, it just sucks that we're losing TRU... another one bites the dust.

I understand it completely. It's the typical approach of predatory pricing - undercut the little guy then raise your prices to insane levels once they're dead.

"And we would've gotten away with it too if it weren't for those meddling department stores."

[ChlorHex]

^ "predatory pricing"... Yes, that sums it up.

[griffin]

ToysRUs (America) have managed to find a buyer for their Canadian arm (http://news.tfw2005.com/2018/06/02/toys-r-us-canada-here-to-stay-364754)... so hopefully the Australian Branch finds a buyer quickly, before the Administrators get too impatient and shut down the business, liquidating all remaining assets.

[griffin]

A short history video of ToysRUs (https://www.youtube.com/watch?v=mNSPl4YsQQ8), from its beginning to end... and a sad look at various abandoned stores in America, which we will see here soon too (but not for long, as most TRU stores here are part of a busy shopping centre that will fill out the location fairly quickly - most US TRU stores were stand-alone buildings, specially built for TRU with their iconic design and colours, so most will end up being left abandoned or demolished).
I just hate how often this sort of thing happens due to sharemarket trading - a profitable business has their shares bought up by an investment firm, only to be over-estimating its value and taking on too much debt to buy all of the shares... resulting in the business being shut down instead of the investment firm, who get most of their money back by selling off the assets and foreign branches. The investment firm should be force to use their own assets to save the still-viable business they are killing off.

ToysRUs in America was still generating about US$12 Billion in annual sales, and would have been making an annual profit if they weren't paying back US$400 million in debt repayments and interest every year. The last three or four years had an annual loss of US$100-200 million, which is thanks to that debt repayment, not from the way the business was being run. If the investment firm didn't over-extend themselves on their greedy buying up of shares, the business would still be operating, and quite profitably, despite competition from Amazon and Walmart.
(the exact same thing happened here with the Dick Smith stores, when an investment firm found out that they were tricked into spending too much on the business, resulting in the business being shut down instead of the investment firm)



At least for us, we will still have the national chain of Toyworld stores here, as an exclusive store for toys to walk into and soak in aisles of toys.

In America, they had Kaybee toys as their version of Toyworld, which didn't survive the peak period of ToysRUs dominance in the early noughties, so now American kids don't have any major toy store to walk into and enjoy the magic of wanting everything they see (like a kid in a candy store).


It's funny that, when ToysRUs first appeared here in Australia in the mid 90s, I never liked it, because it resulted in the squeezing out of some Toyworld stores. It was only more recently that I embraced it, as I ended up being reliant/addicted to it, for the convenience of the nearby store, that I would check every week or two.
I feel bad for the Australian stores that only just opened in the last couple of years, or the employees who only recently got a job and will now have to go through the whole job-hunt process again so soon.
And there was such optimism here in the last 12 months, with huge expansion plans on the horizon, including their proposed Express stores in those old Masters hardware buildings (like a mini shopping centre with several small outlets, with TRU announcing their intention to be located in a few of them).

[Galvatran]

I attended the opening of the South Morang store last year(?), which was inside the defunct Masters store. The line up snaked all the way out to the mini complex's entrance.

[hYpNoS]

I was for 2 toys r us openings, werribee plaza and one in gelong, not even a year and dead, I feel for the staff especially the plaza one, seeing all those familiar faces now without a job :(

[griffin]

Could the Asian arm of ToysRUs be in trouble now? (http://www.toyhobbyretailer.com.au/news/toys-r-us-looks-to-force-fung-out?utm_medium=email&utm_campaign=Newsletter%20-%2015818&utm_content=Newsletter%20-%2015818+CID_39ec46e7529e198c15a41677786107e6&utm_source=Email%20marketing%20software&utm_term=Toys%20R%20Us%20looks%20to%20force%20Fung %20out)
According to an article in Bloomberg (https://www.bloomberg.com/news/articles/2018-08-06/toys-r-us-lenders-may-swap-760-million-in-debt-for-asian-unit), the creditors of the liquidated US company, are trying to auction off the Asian branch, to potentially make a further US$1 Billion dollars to the creditors, who are currently expecting to get just 22 cents in the dollar at this time.

But the sale of the ToysRUs in Asia is being held up by an Asian company who has a 15% stake in the business... and is believed to have been interfering with the process to prevent its sale, so they might be forced to sell their stake by a US court so that the whole business (ToysRUs Asia) can be auctioned off in September.



It all sounds so messy at the moment, and I really hope that this internal interference doesn't put the whole business at risk, by forcing the creditors to instigate a complete liquidation as the only alternative to get some of the money back.

Having ToysRUs stores remain in Asia (Hong Kong, Singapore, Philippines, Japan, Taiwan, etc) makes those nearby destinations more appealing to toy collectors, and they are an alternative source of exclusives or regular toys that don't get released here (if you know someone, or use a shipping forwarder).

[griffin]

ToysRUs lives on in America... and could see a return globally, but not like it was before.


According to a section in the ongoing TRU bankruptcy case (http://news.tfw2005.com/2018/10/02/toys-r-us-u-s-version-2-0-its-not-over-prime-360868), it has been decided that the the ToysRUs branding won't be sold off, but instead will be allowed to be kept as the surviving business for licensing (and possibly franchising) purposes.
Which could see an eventual return of stores with that name in America and here, but since TRU have already sold off all of their inventory and infrastructure, I would imagine that it would end up being more like McDonalds or Toyworld - with the main company selling franchise licenses, providing the stock and making a commission from the sales (in return for doing the cost of marketing and advertising).
If all that does end up happening here and in America, what a kick in the teeth for all those thousands of people who lost their jobs this year... to then see the company return with all new employees.

[reillyd]

It looks like it will be renamed Geoffrey's toy box, and some past employees (management I guess, not retail workers) are still reporting for duty, so hopefully there will be SOME loyalty and they hire back old staff if still available

More details on https://www.seibertron.com/transformers/news/further-details-on-toys-r-us-post-bankruptcy-plan/42190/

[griffin]

Another official announcement (http://www.tfw2005.com/boards/threads/geoffrey%E2%80%99s-toy-box-is-the-new-toys-r-us.1161766/), noting that it is still requiring approval by the Bankruptcy court, but if it is, the new entity will be looking to open stores again in America, and around the world (which could include here).
A shame it comes four months too late for the Australian branch, as this sort of development might have made it more inviting for potential buyers who needed more assurity of parent company support (including the parties who were already making bids, but withdrew later).



Geoffrey, LLC’s Assets to Be Acquired by Its Secured Lenders

WAYNE, NJ – October 2, 2018 – Geoffrey, LLC, Toys “R” Us, Inc.’s intellectual property holding company subsidiary, announced today that it is moving forward with a plan for substantially all of its assets to be acquired by a group of investors led by Geoffrey, LLC’s existing secured lenders.

The announcement was made following a five month marketing effort by Boston-based Consensus, an investment bank retained to market the assets of Geoffrey, LLC, that resulted in several formal and informal proposals to acquire the intellectual property assets. After considering such proposals, it was determined that the proposal from the existing term lenders was meaningfully higher and better than any other global bid or the sum of the bids received on individual assets. The transition of the business to its new owners is pending approval of the United States Bankruptcy Court and all major creditor constituencies are supportive. Geoffrey, LLC thanks all parties that participated in discussions with the company over the prior months, particularly those that submitted proposals, for their thoughtful and diligent engagement.

Geoffrey, LLC, as reorganized, will control a portfolio of intellectual property that includes trademarks, ecommerce assets and data associated with the Toys “R” Us and Babies “R” Us businesses in the United States and all over the world, including a portfolio of over 20 well-known toy and baby brands such as Imaginarium, Koala Baby, Fastlane and Journey Girls. The reorganized company will own rights to the Toys “R” Us and Babies “R” Us brands in all markets globally, with the exception of Canada. It will also become the licensor of the brands to the company’s existing network of franchisees operating in countries across Asia, Europe and the Middle East, and in South Africa.

In addition to continuing to service these markets, the new owners are actively working with potential partners to develop ideas for new Toys “R” Us and Babies “R” Us stores in the United States and abroad that could bring back these iconic brands in a new and re-imagined way. Geoffrey LLC will provide additional detail on this front as it becomes available.

[CaminusPrime]

Another official announcement (http://www.tfw2005.com/boards/threads/geoffrey%E2%80%99s-toy-box-is-the-new-toys-r-us.1161766/), noting that it is still requiring approval by the Bankruptcy court, but if it is, the new entity will be looking to open stores again in America, and around the world (which could include here).
A shame it comes four months too late for the Australian branch, as this sort of development might have made it more inviting for potential buyers who needed more assurity of parent company support (including the parties who were already making bids, but withdrew later).

If this is approved I don't think its going to be too hard to kick start the Australian branch back into gear. The store i worked in closed down on the 5th of august just over 2 months ago and it hasn't been touched since, all the logos and everything are still up on the building, hell much of the old equipment is still all there.
Naturally I'd be happy if there's a reopening and I can potentially get my job back as myself and many others are yet to find new work. If this is passed hopefully something comes up soon.

[griffin]

The Garden City store has been completely gutted, and walls have been knocked down (of the two stores next to it that also closed up at about the same time) for something huge at that end of the shopping centre.


http://www.toycollectors.com.au/blog/e912.jpg


That pillar in the foreground to the left was where the front service counter was, while the pillars to the right were the dividing wall between TRU and the Library.

[CaminusPrime]

The Garden City store has been completely gutted, and walls have been knocked down (of the two stores next to it that also closed up at about the same time) for something huge at that end of the shopping centre.

That pillar in the foreground to the left was where the front service counter was, while the pillars to the right were the dividing wall between TRU and the Library.

Can only imagine what will be there next, What a huge space.
I wonder how many have already been cleared out or just left alone at this point.

[hYpNoS]

The werribee plaza store here in vic was bought by toyworld which seemingly bought all the fixtures and even employed most of the staff (although the number in active service has declined, you won't see all those registers opened), I wonder what had happened to the highpoint store space?

Whatever the case the move to bring it back like this is truly a kick in the teeth and I hope the staff affected have gotten better jobs after the initial closure, dick move by those in charge as per usual:mad:

[griffin]

Stores inside a westfield or large shopping centre would be quickly filled. Stand alone stores would more likely remain vacant for a while... as in America, as most TRU stores were free standing... probably to be more visible to passing traffic.

[SMHFConvoy]

Stores inside a westfield or large shopping centre would be quickly filled. Stand alone stores would more likely remain vacant for a while... as in America, as most TRU stores were free standing... probably to be more visible to passing traffic.

Toymate is opening this weekend at the old Bankstown TRU location.

[griffin]

The closure of ToysRUs in several countries is being noted as a factor in the 12% hit to Hasbro's revenue for the last quarter (http://news.tfw2005.com/2018/10/22/tfw2005-coverage-of-hasbro-2018-3rd-quarter-financial-results-374457)... but they also noted that the absence of a June/July Transformers Movie this year left a hole in this year's sales during that period compared to last year.

[griffin]

Looks like the curse of ToysRUs in 2018 has hit another region, with the Nordic branch of ToysRUs heading into bankruptcy (http://news.tfw2005.com/2018/12/30/top-toy-declares-bankruptcy-nordic-chain-of-stores-includes-br-toys-and-toys-r-us-379889).

It's actually the parent company that has the license for ToysRUs in Scandinavia that is having financial trouble, but a poor Christmas season at their toy stores was the last straw.

[griffin]

Looks like the return of TRU in America will start off with two stores (https://news.tfw2005.com/2019/10/08/geoffreys-new-u-s-troops-to-command-toys-r-us-website-relaunched-powered-by-target-398137) (in Texas & New Jersey), and a website that partners with Target. It sounds like Target could be providing back-bone systems until the new TRU is completely up and running (the Christmas period is the biggest sale period for toystores, so this was probably the only way they could get started up in time for this year's Christmas).