ToysRUs UK & US bankruptcy & closure

[techx]

Came across this piece of news

https://www.nst.com.my/business/2017...iling#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Their prices and product distribution polices are still outdated and work against them, but it seems that the current model is working "enough" for them to stick with it and be able to risk opening more stores.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/t...ons-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 - 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 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, 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. 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... (-_-)



* 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! 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.



* Ease of exchange/refund.