Toys R Us Closure Causes Massive Panic in the US!
When we talk about shopping toys for our children, we thought of the flagship store Toys R Us. We’ve grown up playing their signature toys and furniture that delighted our hearts back then. Suffice to say that the largest toy store left footprints that enabled us to enjoy our childhood days. We preserve the tradition of joy as we give out the same toys for our children. Sadly, it seems everything has come to an end now. Toys R Us has just announced its official business closure worldwide causing massive grief on Americans.
Toys R Us Legacy Throughout the Years
Founded in 1948, Charles Lazarus established the first US children’s furniture store in Washington D.C. Lazarus added toys as freebies or offering to customers who purchased his items. Soon after that, he noticed how his toy offers clicked to the clients more than his furniture. He then decided to shift his company’s focus until it completely became a toy chain store.
Ever since then, the company evolved to become the country’s top supplier of juvenile products. Toys R Us operated their business for more than 65 years with 800 branches across the United States and 800 more stores worldwide. It also acquired rights on the production and distribution of Barbie toys.
In 2001, the company established its US flagship store in New York’s Times Square for an astounding $35 million cost. The massive 110,000 square-foot became the home for amusement arcades, Barbie life-size mannequins and dream house, electronic products such as Dance Revolution, Jurassic Park, Wonka, and Lego. Thousands of tourists flock to the said store for more than a decade before the company closed it in December 2015. Two years later, the firm announced that they would built a temporary 35,000 square-foot store near their former location for the Holiday Season.
Most business analysts and financial experts labeled the said store as a category killer, referring to a business specialized on one sector pushing out other competitors in the industry. This business model doesn’t provide room for improvement and innovation. When the other giant stores such as Amazon, Target, and Walmart emerged, the company’s shares plummeted down in the stock market.
For the first time, its sales fell behind Walmart. To recover from the fall, Toys R Us changed their board of directors and offered IPO in July 2005. They recorded a significant increase of $26.74 billion (around 63%) in their sales. However, the company reverted as a private-owned entity after the IPO, but they still filed in the SEC as a requirement to their debt agreements.
The toy store experienced a crisis when they filed for Chapter 11 Bankruptcy in September 2017 to deal with its astounding $5 billion debt. The said move allowed the company to borrow $2 billion to help the firm pay out its long-term debt.
However, that didn’t happen as the company failed to meet its target sales after the holiday season. They had a net loss of about $164 million in the last quarter of 2017. On December 2017, its UK branches announced they would close at least 26 stores after their liquidation of 15 million pounds tax bill. The company couldn’t pay the said debt, putting at least 3,200 workers at risk of losing their jobs. The US operations followed the statement in January 2018 that caused the closure 182 branches across the country and 12 stores of its sister company, Babies R Us due to business restructuring.
The company released their final closure notice two weeks ago, stating that all of its UK stores are set to close within the next six weeks. The next day, the US store also announced the company officially shut down its business, closing over 800 branch locations across the United States. However, its 200 Canadian stores may likely survive.
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