Toys R Us to close 200 more stores.

G.I.*EDDIE

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Thinking back to The Toys That Made Us series on Netflix, I think it was WTF Mattel?? that was near death and He-Man was a last ditch effort that turned out to be a success that saved them. Maybe it was Hasbro and G.I.*JOE? Doesn't matter. My point is, maybe TrU should (probably should've at this point) go for broke and try their own toy line and toon. Shoot for the moon! What though? *shrugs* Probably wouldn't work. This ain't the awesome 80's!
 

nacho

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Not sure that would save them, but even if it could, they would have had to start development 24 months ago. Their stores will be occupied by Big Lots by the time they could develop a new toy line and some tolerable media to go with it.
 

Dropshipbob

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Nacho, I remember RadioShack doing that too, also stopped going there for that reason.

Now am I wrong, or were they not talking just a few months ago how someone, Hasbro or one of the others, wanted TRU to stay open becauce it benefitted them...now just a few months later and they can't dig the hole for it fast enough?
 

nacho

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I assume all toy manufacturers want TRU to be successful and stay open. TRU generates 15% of the toy sales in this country. They'd be crazy to want them dead.

However, once the writing is on the wall, they'd be similarly crazy to keep sending them new product, knowing they likely weren't going to get paid. Once TRU officially announces liquidation (it's still just "likely" at this point), there will be no new product. Whatever's in the TRU warehouse, that's it. Hasbro has no desire to send millions of dollars of toys into a black hole.
 

Dropshipbob

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You know, I just remembered how I went into their local store once and found an item on "clearance". I had checked out this same item not long before and I noticed they had raised the price which then offset the clearance savings.

My sympathy for their closing just dipped a couple thousand points.
 

nacho

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Can't say I've personally ever seen it at WM, but it's standard practice for Geoffrey.

Oh, I hated that giraffe, with his wee beady eyes, and that smug look on his face, 'Oh, so your going to buy my toys, ooooooooooo'.

Bonus points if you get the reference ;)
 

K-Tiger

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Damn. I was at the grand opening of the one in Killeen. It opened not long before we PCSed from Fort Hood, and I sure hate that I'm going to see it close, too.
 

nacho

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I have such a love/hate with TRU. We've chronicled all their faults as a modern retailer, and yet I'll be sad when they're gone. When I think of all the fun times I've had taking my kids there, to the very same store where I hunted Transformers and GIJoes 35 years ago. All the times my 9-12 year old self conned my grandparents into taking me hunting there on a friday night... and watching my son cajole me the same way.... It'll be missed.

I might have to take my kids for one last jaunt this weekend.
 

Dropshipbob

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It bothers me that I can't think of a time any of my kids have asked to go looking at/for toys, much less at TRU. :( I can't even remember when opened. I do remember hearing of TRu when I was a little kid and wishing we had one. There was one year when I was little, that they opened a store just during Christmas back in 1986 or 87. That was it, just a few months and then they were gone. We went in there and they had a crazy amount of Transformers, both legit and knock-off, as well as other stuff we had never seen, it was magical. I think I ended up buying some sort of Macross Gerwalk knockoff that was 3.75". Still have it too.
 

NSA

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I think if my kids were more into toys I might feel worse/more nostalgic.. but Toys R Us has no special meaning to them other than a bigger toy section than Target.

When I was a kid Toys R Us, Kaybee Toys and small Mom n Pops were it as far as toys were concerned.. outside occasionally getting a GI JOE at a drugstore or something..
 

pcsguy88

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I’m only sad because it’s the last toy store in the city and kids should have that. A whole store just for them.*

It’s funny because my mom brought it up at dinner saying they could shut all of them down as early as tonight. You definitely do not expect to have a toy conversation with mom and dad at the age of 43.







*and sweaty middle aged man children.
 

ThunderDan19

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Hate to see them go. I wish they were better so I'd miss them...

I do have good memories of them at times. It was there I saw the first wave of 25th Joes (then found them cheaper at Wally). It was also there that I first saw the 1:18th BBI jets, helos and such... and then got them cheaper elsewhere or on clearance from them... Also got some 1:6th stuff from them on sale, when they were clearancing them out. So yeah...
 

G.I.*EDDIE

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My best memory was FINALLY getting the Nintendo Power Glove there. I heard angels and singing once that box was in my hand. I can picture the store set up perfectly at that moment.

So then I took it home and used it. *wah wah* Looked cool as heck. Functioned like crap. NOTHING like it did in the The Wizard. As cool as it looked, I eventually returned it.
 

nacho

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Yeah, we made a pity farewell run today also, and our was packed too. Had to wait a while just to check out. They had a bogo-40 on Marvel Legends, and I found one I wanted, and grabbed a second on the cheap to use for fodder. The kids both got a small item, just so they could remember the experience.

We even took pictures. My wife was focused on the kids, but I took pics of the isles, full of stuff. I took as many widescreen shots as possible, just to get a sense of how much stuff they carried. Maybe I'll show my grandkids in a few decades when they don't know what a physical toy store is. "What do you mean you had to drive 45 minutes to get toys? Why didn't the Amazon drones bring it to you?" "Well let me tell you about a magical place. You see, back in my day..."

I'm a little confused about how this shutdown is likely going to work. Normally when chains go out of business, they have big sales for a month or two to get rid of inventory. The articles I read just implied that the doors were going to suddenly close for good. Where is that inventory going? I don't think it's going back to manufacturers (although maybe it should, as they're owed a lot of money). Is it just going to suddenly disappear and show up 6 months from now at Big Lots? There are many TRU exclusive items I'd like to own, but they're not worth full price. Hopefully the stock will surface somewhere.
 

K-Tiger

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I imagine some of the inventory will hit the closeout circuit. I have to believe they have to service whatever of the debt it can. End of an era, folks.
 

nacho

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Of course, I don't doubt that part of their bankruptcy is to make a good faith effort to service debt. But it's odd to not have a period of weeks or months of "sell-off". Maybe they don't have the cash to staff the stores or pay the electric bills. Maybe it's better to just wholesale liquidate the inventory, but I don't recall any other chains going out that way. Who could possibly absorb the cost or space necessary for 600-800 TRU's worth of merch?
 

K-Tiger

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Of course, I don't doubt that part of their bankruptcy is to make a good faith effort to service debt. But it's odd to not have a period of weeks or months of "sell-off". Maybe they don't have the cash to staff the stores or pay the electric bills. Maybe it's better to just wholesale liquidate the inventory, but I don't recall any other chains going out that way. Who could possibly absorb the cost or space necessary for 600-800 TRU's worth of merch?
Yeah, that's a lot of product. Best Toys For Tots year ever?

Bet they crush the LEGO.
 

nacho

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Not only are the manufacturers going to be hurt by not getting paid for a ton of merchandise, but sales in the short/medium term are going to be hurt by that same merch hitting the clearance section or liquidating retailers like Big Lots, Kohls, Five Below, etc. Even WM and Amazon could feel that pain, at least briefly until the old stock is gone.

I wouldn't put it past LEGO to have it in their contract that it can't be liquidated, but rather must be destroyed. They can't have 800 toy stores worth of cheap stuff out there undercutting all the other sales channels. Considering how much LEGO product TRU carried, it would crush their sales elsewhere for a year or more. Toypocalypse indeed.

I don't know why, but I find this process far more interesting than when CompUSA, Circuit City, and Borders went under. Maybe because I follow toys more closely, but I'm morbidly fascinated by the details.

Still have my fingers crossed for an 11th-hour restructuring or buyout that will allow them to remain open. As I understand it, most of the stores still turned a modest profit, but debt service was what was dragging down the whole endeavor. I wish there was a good source that explained it all in better detail.
 

nacho

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I've been reading up on leveraged buyouts. Apparently the corporate raiders that saddled TRU with a crap-ton of debt are notorious shitbags that have done this to many other companies in the past. However, it's not clear that TRU's woes in 2005 (the time of the LBO) wouldn't have taken them down anyway without it. We may have gotten more years out of TRU than we'd have gotten otherwise, hard to say.

I guess part of my confusion about the LBO is that on the surface, it makes no sense to buy a company, and in doing so, saddle it with so much debt that the operating cash flow can't cover the interest payments, thus driving it into bankruptcy. I'm struggling to see how that's profitable for anyone involved.
 

nacho

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According to what I'm reading, yes. Bain started the ball rolling that caused the 2004 bankruptcy. KB didn't go down completely until a second chapter 11 in 2008, but it really never recovered from what Bain had done to them earlier in the decade.
 

nacho

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Excerpts from Yahoo Finance comparing TRU's demise to KB's fate:

"Toys R Us was a pioneer of the big-box-store concept and became America’s premier toy store. KB’s stores, being primarily mall based, faced high rents and long leases, limiting their ability to compete on price with Toys R Us. Their stores were tiny, cramped, claustrophobic. Toys R Us locations were high-ceilinged, cavernous destinations with expansive inventory. If a child wanted it, Toys R Us almost certainly had it, and often at a cheaper price."

Oh the irony.
 

G.I.*EDDIE

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Not only are the manufacturers going to be hurt by not getting paid for a ton of merchandise, but sales in the short/medium term are going to be hurt by that same merch hitting the clearance section or liquidating retailers like Big Lots, Kohls, Five Below, etc. Even WM and Amazon could feel that pain, at least briefly until the old stock is gone.

I wouldn't put it past LEGO to have it in their contract that it can't be liquidated, but rather must be destroyed. They can't have 800 toy stores worth of cheap stuff out there undercutting all the other sales channels. Considering how much LEGO product TRU carried, it would crush their sales elsewhere for a year or more. Toypocalypse indeed.
If the product was never paid for I'd want it returned. This way it doesn't undercut your product at other stores AND you can still sell it to other retailers still making money on it. At the very least you could sell it cheaper to places like Big Lots and Family Dollar. It'd be a win/win not a lose/lose.
 

nacho

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I agree that sounds reasonable, but I don't think that's how it will play out. I think the manufacturer's healthy retail partners are going to get undercut by cheap merch from the bankrupt one... the one that's stiffing the supplier.

Hasbro and WTF-Mattel were hesitant to supply them for the holiday season for this exact reason, but they knew that if they didn't, it would doom TRU for sure. So for trying to save a big customer, they're going to get a big black eye. I *almost* feel sorry for them... but when I think of how many crappy decisions they have made that are not consumer friendly, I get over it.
 

G.I.*EDDIE

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Yeah, not a one of them deserve sympathy. Maybe the hundreds of thousands of employees that have no say in decision making, sure. I feel for all of those folks. But the top men? :talktothehand:
 

K-Tiger

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If the product was never paid for I'd want it returned. This way it doesn't undercut your product at other stores AND you can still sell it to other retailers still making money on it. At the very least you could sell it cheaper to places like Big Lots and Family Dollar. It'd be a win/win not a lose/lose.
Speaking on LEGO only.

LEGO sets are often time sensitive. Quite a bit of TrU stock has already left the shelves at places like target and walmart. Then you have exlusive lines like Speed Champions. LEGO is known to destroy product. I imagine some small bit will be returned to be sent to LEGO retail locations, as well as charity. BL won't see any of it, Ross, TJ Maxx and Marshalls will see very little.

IT is any interesting situation. Guess we wait and see.
 

nacho

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You have stuff like Technic... TRU has a whole wall of it, while WM carries one or two SKU's, tops. I can't imagine a lot of that ending up at places like BL or Ross. I don't know how much control Lego (or Hasbro or Mattel) have over the stock at TRU at this point. I can only assume it's a total loss for those guys. I'd be stunned if TRU has the money, manpower, or desire to to ship it all back.

If TRU really is going under, I'd prefer a big closeout sale than the inventory just vanishing to parts unknown. I never visit those crappy discount places. They're worse than K-Mart. The odds that I'd find the TRU items I wanted would be slim to none.
 

Dropshipbob

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I remember being at TRU when they did the midnight release for SW: Phantom Menace, that was kinda neat. They opened the doors and a ton of people went flying in, grabbing stuff left and right, while I calmly walk in, pick up my one figure and check out before all others. :LOL:

While out in the parking lot I overhear two guys and a girl complain about how "retarded" the whole thing was.
 

NSA

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I feel like there is a golden opportunity here for some amazing PR by some company. Even if they don't 'bail out' TRU, if they somehow leverage the name/etc I think they can capitalize on all this nostalgia-boners everyone is getting see TRU close.

Maybe we should start a GoFundMe and take 5% off the top :)