I don't wanna grow up...but Toys 'R' Us is pretty much no more.
Future kids might never know the joy of walking into a toy store and wasting half a day looking at and taking a mental list of all the toys they want to bug their parents for.
American retail toy icon Toys 'R' Us announced early Thursday that it would be closing or selling all of its 800 U.S. stores. A majority of the stores will most definitely have their inventory liquidated and its doors closed by the end of 2018, Reuters reported.
The move could affect as many as 33,000 jobs and also includes the toy retailer's Babies 'R' Us stores.
According to CNBC:
Even as it winds down, the retailer is looking for ways to keep the brand alive, said the people familiar with the company's plans. In one plan, the company would sell the stronger Toys R Us Canadian business, along with roughly 200 of its most profitable U.S. stores, to a new buyer. The new business would then be run out of Canada.
"This is a profoundly sad day for us as well as the millions of kids and families who we have served for the past 70 years,” Toys 'R' Us CEO Dave Brandon said.
A combination of events happened that led to the death of Toys 'R' Us in the U.S.
Online retailers - like Amazon - took a large chunk of business from the toy-selling company. Amazon offers prices on items that Toys 'R' Us simply can't match. That and the low prices at big box retailer Walmart's ever expanding toy section made it very difficult for Toys 'R' Us to compete.
It also doesn't help that the toy chain was saddled with a mountain of debt after a conglomerate of companies bought Toys 'R' Us and took it private.
CNN Money reported:
Toys "R" Us' debt problems date back to well before Amazon (AMZN) was a major threat. Its debt was downgraded to junk bond status in January of 2005, at a time when Amazon's sales were just 4% of their current level.
A year later the company was taken private by KKR, Bain Capital and real estate firm Vornado. The $6.6 billion purchase left it with $5.3 billion in debt secured by its assets and it never really recovered.
Of course, no one is complaining about the ease of online shopping, but there's something to be said for the charm of physically going to a specialty store.
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