News & Politics

Toys R Us to Close All 800 of Its U.S. Stores

Toys R Us, which built a global empire based on the simple idea that there should be a one-stop shop for any toy a child could wish for, is closing all 800 of its U.S. stores six months after it filed for bankruptcy.


The problem was somewhat self-inflicted. The company racked up billions in debt in 2005 after a leveraged buyout. With the debt hanging around its neck, no buyer stepped forward after the bankruptcy to make an offer.

Up to 33,000 employees will lose their jobs.

Washington Post:

Toys R Us, once the country’s preeminent toy retailer, has been unable to keep up with big-box and online competitors. The recent holiday season dealt another blow to the embattled company, which struggled to find its footing even as the retail industry racked up its largest gains in years. In January, Toys R Us announced it would close 182 U.S. stores, or about one-fifth of its remaining locations.

A group of toy makers led by MGA Entertainment, the giant behind brands such as L.O.L. Surprise!, Little Tikes and Bratz on Wednesday submitted a bid to buy Toys R Us’s Canadian arm, which includes 82 stores, according to Isaac Larian, MGA’s chief executive. He added that he is also looking into buying as many as 400 U.S. stores, which he would seek to operate under the Toys R Us name.

“There is no toy business without Toys R Us,” Larian said, noting that he sold his first product to the chain in 1979. “It’s a big deal and I’m going to try to salvage as much of it as possible.”

According to its September bankruptcy filing, Toys R Us owes MGA Entertainment $21.3 million.

Despite turnaround efforts at Toys R Us, which included adding more hands-on “play labs,” retail experts say the 60-year-old company has been unable to get customers back into its stores. It doesn’t offer the low prices or convenience of some of its larger competitors, nor the fun-filled experience that many smaller outfits do, some analysts have said.


While the internet vs. brick and mortar stores story is an old one, it’s not an overriding issue in this case. It’s not only that the toy industry has changed, with “smart toys” being all the rage. The nature of play itself has changed significantly. Smart parents still get their kids Lincoln Logs and building blocks — toys that fire the imagination and make kids problem solvers — but most parents don’t.

While Toys R Us gamely tried to keep up, they weren’t anticipating trends in the industry. Like Sears and other big box retailers that had similar failings, they were considered too old-school for most younger parents who are apparently seeking out newer, fresher, smaller retailers that are offering pizzazz and sizzle.

Christmas will be a little different next year without a quick walkthrough of our local Toys R Us to get us in the holiday spirit.

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