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Resisting Evil
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The Associated Press
Published Wednesday, January 24, 2018 8:32AM EST
Last Updated Wednesday, January 24, 2018 12:27PM EST

NEW YORK -- Toys "R" Us, squeezed by Amazon.com and huge competitors like Walmart, will close 20 per cent of its U.S. stores within months.

Hobbled by $5 billion in debt, the company that once dominated toy sales in the U.S. filed for bankruptcy protection in September.
Chairman and CEO Dave Brandon said in a letter that tough decisions are required to save Toys "R" Us.

Industry analysts said around 180 of the company's 900 locations in the U.S. will be shuttered.

The company did not immediately return a message early Wednesday.
Brandon said that the store closings will begin in February and the majority of the targeted locations will go dark by mid-April. At other locations, the retailer is combining its Toys "R" Us and Babies "R" Us stores.

Meanwhile, Toys "R" Us Canada president Melanie Teed-Murch said all 83 stores are open for business.

"Since the initiation of our September court proceedings, our primary focus has been reimagining our business with you, our customers in mind and ensuring a normal course of operations," Teed-Murch said in an open letter to customers. "Our team is hard at work strengthening our competitive position and making the improvements necessary to ensure that we have the products when, where and how you choose to shop with us."

Toys "R" Us, based in Wayne, N.J., has struggled with debt since private-equity firms Bain Capital, KKR & Co. and Vornado Realty Trust took it private in a $6.6 billion leveraged buyout in 2005. The plan had been to take the company public again, but weak sales have prevented that from happening.

Toys "R" US isn't alone. Around three dozen retailers sought bankruptcy protection last year due in large part to a radical shift in consumer behaviour, both in where they shop, and what they buy. Some of the companies that have gone under have been small, but there are also big retailers on the list, like Payless Shoe Source, Gymboree Corp. and True Religion jeans.

Toys "R" Us closed its flagship store in Manhattan's Times Square, a huge tourist destination, about two years ago.

Brandon said Wednesday that the company made some missteps during the critical holiday shopping season.

"As the leader of this company, I want you to know that we can and will address the gaps in the experience that you may have had when shopping this holiday," Brandon said. "My team is already hard at work to make the improvements necessary to ensure that we have the products you want, when, where and how you want them."

-- With files from The Canadian Press
 

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It’s funny how Bain Capital is a major partner in TRU now and was a major partner in Kay-Bee when they went belly-up...

The old mob guys used to call that a “bust-out”.
 

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Firearms collector
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It’s sad, as TRU has gotten a lot of my business over the years. I was also sorry to see Hastings, a midwestern media store, close its doors a couple years back. I can’t help but compare the two.

But they do mark up their merch compared to their competitors. The term “TRU tax” is well known among Lego collectors.

Honestly...there’s nothing they sell that I can’t find elsewhere. That being said, I do hope they can pull out of this, if for no other reason than my own nostalgia.
 

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1:6 Miniature Craftsman
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681 Posts
They only have themselves to blame for their woes. Price gouging isn't going to win you customers...
Many bricks & mortar stores in the US are in serious trouble, partly because of e-trade and partly because the economy is screwed. Toys R Us were forced to increase their prices partly because of debt and partly because many of their stores were locked into extortionate rental agreements. Mall operators are now paying for their short-sightedness because many retailers are not renewing when their leases expire. 2017 was the worst year on record for the retail industry and this year is looking like it is going to be even worse.

More than 8,640 stores closed last year, which is significantly higher than the previous record of 6,200 store closings in 2008.

Approximately 147 million square feet of retail space closed last year, surpassing the previous record of 115 million in 2001.

Up to 25% of all shopping malls in the country will shut down by 2022 and around 50% of retail sales positions will be lost during the same period.

$100 million of high-yield retail borrowings matured last year, but that will increase to $1.9 billion this year, and it will balloon to annual average of almost $5 billion in the next few years.

More than 300 retailers filed for bankruptcy last year, an increase of 31% from the year before.

Here is a list of the next lot of large retailers that are likely to file for bankruptcy:
22 Retailers at Risk of Bankruptcy: Closing Stores | Money

And on top of all that, e-retail has stopped taking up some of the slack. Jan 2018 was the first month on record in which electronic commerce didn't report an increase in sales over the previous month. If the same thing happens in Feb, then this year is going to be much worse than last year.

If anyone tries to tell you that the economy is recovering, they are lying. The US is drowning in debt. A few interest rate rises this year will see it all get pulled down under the waves.
 

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This whole things reads almost exactly like the fall of Borders Books and many other b&m retailers that have fallen by the wayside. It’s a bummer, but in the long run, the future of the majority of retail is going to be on-line, and these companies should have been preparing better; and here’s a novel idea, when your ship is sinking you don’t give ill-prepared and incompetent leadership multi-million dollar bonuses, when you should be putting that money toward paying your debts and restructuring. Make those execs take a pay cut. I feel bad for the store employees, but not the over-paid worthless ass-hats who always seem to be running these companies into the ground.
 

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God Bless America
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.............and here's a novel idea, when your ship is sinking you don't give ill-prepared and incompetent leadership multi-million dollar bonuses, when you should be putting that money toward paying your debts and restructuring. Make those execs take a pay cut. I feel bad for the store employees, but not the over-paid worthless ass-hats who always seem to be running these companies into the ground.
THIS in spades.
 

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God Bless America
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In case anyone is waiting....

 

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God Bless America
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1,528 Posts
Wow, that was quick.
I also received an e-mail from TRU saying they are limited to stock on hand, which I take to mean no more trucks. Up until last week/week before, they were still getting shipments.

Looks like it won't be long now....
 
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