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Autbot_Benz
09-06-2017, 09:52 PM
Toys “R” Us has hired restructuring advisers from the prominent law firm Kirkland & Ellis as it tries to cope with hundreds of millions of dollars of debt coming due, according to two people briefed on the matter.

Among the options that the retailer, which is owned by private equity firms, is considering includes filing for bankruptcy, the people said.

Toys “R” Us must find a way to pay back about $400 million in debt as it tries to increase sales in the upcoming holiday season.

The company, based in New Jersey, is still holding out hope that it can refinance the debt. But the hiring of the restructuring lawyers by a financially troubled company usually suggests that bankruptcy is a real possibility. The hiring of Kirkland & Ellis was first reported by CNBC.

“Toys ‘R’ Us is evaluating a range of alternatives to address our 2018 debt maturities, which may include the possibility of obtaining additional financing,” a company spokeswoman said in a statement on Wednesday.

The company was bought by the private equity firms Kohlberg Kravis Roberts and Bain Capital, as well as the real estate firm Vornado Realty Trust, for about $6 billion in 2005.

For years, the company dominated toy sales, and its Babies “R” Us chain was a leader in baby products like diapers and strollers. But it has faced intense competition from big box retailers like Walmart and Target that have ramped up toy offerings. The rapid growth of toy sales on Amazon.com has also cut into the market share of Toys “R’ Us.



Toys “R” Us closed its flagship store in Times Square in 2015 to save money on rent, but in August, it opened a smaller, seasonal store a few blocks away to take advantage of holiday shoppers in New York.

Many traditional retailers have struggled to compete with Amazon, but the debt load carried by Toys “R” Us has amplified that pressure.

The company has about $5 billion in long-term debt and has been burning through cash, as sales decline.

As of April 29, the company had $301 million in cash or cash equivalents, down from $458 million a year earlier, according to a quarterly securities filing in June. The company said in the filing that it had hired the firm Lazard to help with its refinancing efforts.

But Toys “R” Us warned at the time that “a number of factors including factors beyond our control could reduce or restrict our ability to refinance these debt obligations on favorable terms.”

Already this year, there has been a wave of retail bankruptcies, including the children’s clothing retailer Gymboree, Payless Shoesource and rue21, which sells clothing for teenagers. Other retailers have closed thousands of stores and laid off tens of thousand of workers as they try to cut costs and compete with e-commerce sites.

https://www.nytimes.com/2017/09/06/business/toys-r-us-bankruptcy-advisers.html

CylonsKlingonsDaleksOhMy
09-06-2017, 09:56 PM
Huh. Another Blockbuster in the making?

Prowler
09-06-2017, 10:02 PM
Never liked Toys R Us much. Back when I used to buy TMNT action figures still, they were always a couple of bucks or so more expensive at Toys R Us than at anywhere else. Plus, the place looks like a giant warehouse and is kind of soulless, imo. That being said, I don't wish bankruptcy on it, since many people would lose their jobs if it happened.

TheCanadiandrome
09-06-2017, 10:13 PM
Noooo say it isn't so?!

oldmanwinters
09-06-2017, 10:18 PM
I enjoy going into some TRUs near me, but the big stores usually feel empty of people. I can't imagine how much a store needs to clear a day to make a profit, but when you only sell plastic pieces of entertainment and baby clothes, most folks aren't going to casually browse the aisles. I'm surprised this hasn't happened sooner.

Back when I used to buy TMNT action figures still, they were always a couple of bucks or so more expensive at Toys R Us than at anywhere else. Plus, the place looks like a giant warehouse and is kind of soulless, imo. That being said, I don't wish bankruptcy on it, since many people would lose their jobs if it happened.
Largely my experience too.

Powder
09-06-2017, 10:21 PM
They charge too much, treat their merchandise like crap, take way too long to stock stuff in-store, & have the single worst online shipping system out there. Adios.

Autbot_Benz
09-06-2017, 10:34 PM
They charge too much, treat their merchandise like crap, take way too long to stock stuff in-store, & have the single worst online shipping system out there. Adios.

This and Amazon is kicking there ass in toy sales

sdp
09-06-2017, 10:41 PM
It's hard to judge Toys R Us for me as an adult but as a kid I absolutely loved it and it was easily my favorite toy store so it'll be a shame to see it go. I'm already sad I never got to visit the Time Square store that I saw as a kid in tons of movies, even if it was technically FAO Schwarz.

I think it really is the end of Toys R Us, it has been having trouble for nearly a decade now, this isn't even the first "scare" of TRU going away. So many memories, the last ones I had there as a kid were going to the Pokemon TCG League every saturday. Even KB Toys which I hated really left a hole when it left.

Amazon isn't only to blame though, kids buy less toys now and people shop online more, it's a mixture of both. I actually remember when Amazon used to fulfill TRU orders in the early 00's.

My TRU could be a bit slow in getting new stuff in and a lot of space was wasted that could've had more product but I still loved it. Sales were rare but I still found a few decent ones, got my first Mew there as well.

Prowler
09-06-2017, 10:51 PM
I enjoy going into some TRUs near me, but the big stores usually feel empty of people. I can't imagine how much a store needs to clear a day to make a profit, but when you only sell plastic pieces of entertainment and baby clothes, most folks aren't going to casually browse the aisles. I'm surprised this hasn't happened sooner.


Largely my experience too.
yeah the few times I've been there as an adult it was rather empty. A large store being deovid of people is a bit unsettling.

TRU also sells video games... but so do many other places. The day of people buying video games at toy shops are long gone.

It's hard to judge Toys R Us for me as an adult but as a kid I absolutely loved it and it was easily my favorite toy store so it'll be a shame to see it go. I'm already sad I never got to visit the Time Square store that I saw as a kid in tons of movies, even if it was technically FAO Schwarz.

I think it really is the end of Toys R Us, it has been having trouble for nearly a decade now, this isn't even the first "scare" of TRU going away. So many memories, the last ones I had there as a kid were going to the Pokemon TCG League every saturday. Even KB Toys which I hated really left a hole when it left.

Amazon isn't only to blame though, kids buy less toys now and people shop online more, it's a mixture of both. I actually remember when Amazon used to fulfill TRU orders in the early 00's.

My TRU could be a bit slow in getting new stuff in and a lot of space was wasted that could've had more product but I still loved it. Sales were rare but I still found a few decent ones, got my first Mew there as well.
When i was a kid there were still some local toy shops around, so I got most of my toys and games form them. I count on one hand the stuff I've bought form TRU. I've been there once or twice as a kid sure, but don't remember buying anything there back in the day, tbh. Also, I believe TRU was firstly one of those big warehouse chains by the road/highway before it becoming just another store found at big malls/shopping centers.

CylonsKlingonsDaleksOhMy
09-06-2017, 10:55 PM
They charge too much, treat their merchandise like crap, take way too long to stock stuff in-store, & have the single worst online shipping system out there. Adios.

That and they always smelled of piss and vomit.

Prowler
09-06-2017, 11:02 PM
How large are Toys R Us stores in USA? The only ones I've been to were in malls... so they were large but not HUGE. But originally Toys R Us were massive stores in the same vein as those big ass supermarkets by the road with parking lot and such, right? So if I find Toys R Us at the mall soulless enough already I can only imagine one 3-4 times larger.

sdp
09-06-2017, 11:42 PM
KB Toys were the toy stores you found on malls, they were small but got the job done in making mom's trips to the mall tolerable. They mostly had older toys which is why I didn't like them but it was still cool and had a "look" that is very nostalgic.

Toys R Us on the other hand were a complete store so it was HUGE, at least to the eyes of a kid but basically an entire store for toys. Walmart's or other supermarkets just couldn't compete since the whole toy section a store like K-Mart might have was just the boys section alone or part of it. There's also the marketing and it worked, the stupid TRU Kid songs, Jeffrey the giraffe costume to get a picture with and the free packages that had AOL floppy discs and other goodies. Not to mention when they themed it for Halloween/Christmas or new movies or shows they would go all out.

Prowler
09-06-2017, 11:52 PM
KB Toys were the toy stores you found on malls, they were small but got the job done in making mom's trips to the mall tolerable. They mostly had older toys which is why I didn't like them but it was still cool and had a "look" that is very nostalgic.

Toys R Us on the other hand were a complete store so it was HUGE, at least to the eyes of a kid but basically an entire store for toys. Walmart's or other supermarkets just couldn't compete since the whole toy section a store like K-Mart might have was just the boys section alone or part of it. There's also the marketing and it worked, the stupid TRU Kid songs, Jeffrey the giraffe costume to get a picture with and the free packages that had AOL floppy discs and other goodies. Not to mention when they themed it for Halloween/Christmas or new movies or shows they would go all out.
Never heard of KB Toys, so I'm assuming they never made it to where I live.

All Toys R Us in Portugal(there's 9 of them, it seems) are in malls these days, it seems, so they're not gigantic like the ones you have in USA. We don't have Wallmart here so no idea what that store looks like either.

Someone mentioned Blockbuster... there were a few in my city in the mid 2000s, but they disappeared rather quickly. Me and my family always went to our local video rental store... which closed down around 2013 or 2014. It lasted longer than I expected tbh.

Storm Eagle
09-07-2017, 12:43 AM
That and they always smelled of piss and vomit.

What the hell TRUs have you been to, dude?

Prowler
09-07-2017, 12:44 AM
What the hell TRUs have you been to, dude?
Yeah I hope he was just joking. Cylons has a quirky sense of humor, so you can never tell heheh

CylonsKlingonsDaleksOhMy
09-07-2017, 08:01 AM
What the hell TRUs have you been to, dude?

Yeah I hope he was just joking. Cylons has a quirky sense of humor, so you can never tell heheh

I'm actually not. Every time I'd try to go into one, it smelled like kindergartners had been sick and scared everywhere. And some poor employee always had a mop and bucket. And a kid was always throwing a tantrum over a toy.

All of that. Every single time. I quickly stopped trying to find anything in TRU.

Storm Eagle
09-07-2017, 08:09 AM
I'm actually not. Every time I'd try to go into one, it smelled like kindergartners had been sick and scared everywhere. And some poor employee always had a mop and bucket. And a kid was always throwing a tantrum over a toy.



I remember some kid starting up the second I even entered the doors. I don't even know how I stayed.

More often than not, things have been fine in my experiences. I actually have two good memories of discussing action figures with a parent who had their kid with them.

Though the best part was being in a TRU on a Black Friday, and the day before Christmas where the stores were open wicked early for people to shop. It was kind of interesting being in a TRU with no kids around whatsoever.

CylonsKlingonsDaleksOhMy
09-07-2017, 08:28 AM
I remember some kid starting up the second I even entered the doors. I don't even know how I stayed.

More often than not, things have been fine in my experiences. I actually have two good memories of discussing action figures with a parent who had their kid with them.

Though the best part was being in a TRU on a Black Friday, and the day before Christmas where the stores were open wicked early for people to shop. It was kind of interesting being in a TRU with no kids around whatsoever.

Maybe it was just the stores in my area. But it was always pretty bad.

The Deadman
09-07-2017, 09:08 AM
They charge too much, treat their merchandise like crap, take way too long to stock stuff in-store, & have the single worst online shipping system out there. Adios.

Considering I've actually worked at a TRU, the merchandise looking like crap is a warehouse issue, because I've seen trucks come in with the product just thrown all over them, especially if it's a big shipment. Stores taking way too long to get things in stock is also a warehouse/management issue, cause it goes by inventory numbers and half the time they wont send what you need until its too late.

plastroncafe
09-07-2017, 09:40 AM
Are Millennials going to get blamed for killing the big box toy industry?

RaphaelinSTL
09-07-2017, 10:55 AM
I still hop in to a Toys R' Us at least every few months or so just to see what's in stock. Obviously as a 30 year old man ... it doesn't have the same luster as it once did when I was 10 and younger, but I still enjoy going.

Some of my funnest memories were always stopping by the Toys R' Us and KB Toys stores. They seemed so HUGE back when you were little.

Autbot_Benz
09-07-2017, 02:56 PM
Who needs Toys R us when you have Big Bad Toy Store and Amazon. Better Prices they know how to ship an item and not just throw a brown piece of paper on top and call it secure in the box.

I mean BBTS uses bubble wrap and write Fragile on the box they have the best shipping I have ever seen.

Andrew NDB
09-07-2017, 03:00 PM
Toys 'R' Us was a magical place. As a kid there was a gigantic one in my city, with aisles and aisles of stuff. You could spend like 30 minutes walking through it all, and still not see everything. The video game aisle(s) was particularly memorable. There was something very special about walking that slip you rip off the bottom to go and claim your game at the front. I remember I'd be staring at the "$79.99" price tag for Chrono Trigger and being like, "F***, I'm never going to save up enough allowance for that."

Then it went out of business and Toys 'R' Us became a hybrid with Babies 'R' Us in a tiny building. It was a FAKE Toys 'R' Us from then on and it's a real shame to go in there to buy my daughter toys now, what it's become.

Prowler
09-07-2017, 03:24 PM
Isn't Toys R Us the biggest toy store chain in the world, anyway? Or at least the most well-known one? Even if there's other options out there for people to buy toys, how can Toys R Us just die out like that? Everyone knows Toys R Us.

Also, I speak for myself only but I've never like ordering stuff online myself. I prefer going to store and pick stuff myself. I hate waiting for something to arrive on mail, and sometimes I might not even be at home or no one opens the door to the mailman and I gotta pick up the order at my local post office, which requires waiting in a long line sometimes and that is annoying.

sdp
09-07-2017, 07:12 PM
I didn't even know TRU was so big outside the US, I mean it's not huge but until this thread I didn't know it had stores in Europe but also in Asia, I think Latin America is the only place it doesn't have a presence which is really odd they'd skip it.

Anywho, it's still won't be the end of TRU, they're only likely filing for Chapter 11 bankruptcy which allows them to re-negotiate their debts and many companies are able to though not all, counting TRU has been having trouble for a while it'll be more difficult but it'll still be a slow death if it indeed dies, just look at K-Mart still hanging in there and it filed for Ch. 11 many years ago, K-Mart is not a good example as I think TRU still has a chance of surviving if the are smart. Also the doom of TRU doesn't mean the end of TRU elsewhere, just take a look at Radioshack, it's dead in the US but through contracts or it still exists in other parts of the world.

Autbot_Benz
09-18-2017, 11:37 AM
http://www.businessinsider.com/toys-r-us-could-file-for-bankruptcy-this-week-reports-2017-9

Toy retailer Toys R Us may be on the brink of filing for bankruptcy.

It's just one of several options the chain is reportedly considering to pay down $5 billion in debt it owes as a result of a leveraged buyout in 2005, according to the Wall Street Journal.

The chain's trio of owners private equity firms Kohlberg Kravis Roberts and Bain Capital Partners and real estate investors Vornado Realty Trust bought the company in a deal worth $6.6 billion, taking it private.

A Chapter 11 bankruptcy would allow the company to restructure $400 million in debt that is due in 2018, then renegotiate the rest.

CNBC previously reported that the chain hired law firm Kirkland & Ellis LLP, that it was exploring options to take care of that debt, and is currently working with its creditors to stave off a Chapter 11 filing.

According to a new report by CNBC's Lauren Hirsch, the filing could come as soon as this week.

The debt crisis looms at a critical time for the toy seller. Toys R Us last year made 40% of its sales in the fourth quarter, thanks to the mad rush of holiday shopping. Vendors are feeling increasingly anxious about the chain's ability to pay down its debts, which could lead to a shortage of toys to stock its shelves and further exacerbating the issue.

Toys R Us has also struggled as its two main businesses, baby goods and toys, have moved online increasingly quickly in the last few years.

A Toys R Us spokesperson did not immediately respond to a request for comment.

Papenbrook
09-18-2017, 04:16 PM
That's depressing.

R.I.P. Toys "R' Us.

TMNT_Guy
09-18-2017, 05:39 PM
I've never been to a Toy R Us in my entire life. The nearest one to me has always been a good 30-40 miles away. I did however have a KB Toys at my mall...which incidentally is closing this month. That leaves Walmart as the only reasonably close store in my area to not only buy toys, but pretty much everything else.

I certainly hope Toys R Us can turn things around, I don't like seeing any long time store go out of business. I recently went to Toys R Us' website to buy a plush that was supposed to be exclusive to Toy R Us but they didn't even have it listed...yet Amazon somehow did. If their online store is as bad as their regular store at stocking items then it's not hard to imagine why this happened.

Prowler
09-18-2017, 05:44 PM
That's depressing.

R.I.P. Toys "R' Us.
Tbh, I find Toys R Us stores more depressing on the inside than the news of its possible bankruptcy.

sdp
09-18-2017, 11:12 PM
Let's hope it makes it through, even if you don't care about TRU, if you like toys then this will no doubt affect the toy industry. The stocks of various toy companies like Mattel took a toll because of this news and that means many toys you've been getting might not happen in the future in favor of what sells at Walmart best.

Most of their problems are not with selling toys but selling baby products which is a very profitable market but has all gone mostly online.

Autbot_Benz
09-19-2017, 12:24 AM
They have filed for bankruptcy The company said it will continue to operate as usual its approximately 1,600 Toy R Us and Babies R Us stores around the world.

https://www.cnbc.com/2017/09/18/toys-r-us-files-for-chapter-11-bankruptcy.html

ProactiveMan
09-19-2017, 02:58 AM
The TRUs around here are pretty lame. They're huge warehouse sized stores that don't seem to sell anything. They must make most of their money on baby stuff and Lego because they never restock anything else. They don't carry NECA stuff here, and they stopped selling Masterpiece Transformers after they failed to convince anyone to swallow their insane mark-up. They haven't sold video games in years.

I don't have any attachment to the brand either. They didn't set up here until the 90s, when they more-or-less killed the toy stores that I frequented as a kid.

TMNT_Guy
10-03-2017, 04:00 PM
I found a great video discussing why and how Toys R' Us filed for bankruptcy. Intrestingly it may not have anything to do with competing with Amazon and other online retailers.

4JYUo9WKkao
https://www.youtube.com/watch?v=4JYUo9WKkao

Prowler
10-03-2017, 04:07 PM
The TRUs around here are pretty lame. They're huge warehouse sized stores that don't seem to sell anything. They must make most of their money on baby stuff and Lego because they never restock anything else. They don't carry NECA stuff here, and they stopped selling Masterpiece Transformers after they failed to convince anyone to swallow their insane mark-up. They haven't sold video games in years.

I don't have any attachment to the brand either. They didn't set up here until the 90s, when they more-or-less killed the toy stores that I frequented as a kid.
I believe it didn't get here until the 90s either. But they do sell video games here and are by far the largest stores where you can buy toys in my country. It's either at TRU or at a big supermarket or a general store or something.

A shame cuz TRU are more expensive than average.

sdp
10-03-2017, 10:04 PM
I found a great video discussing why and how Toys R' Us filed for bankruptcy. Intrestingly it may not have anything to do with competing with Amazon and other online retailers.

https://www.youtube.com/watch?v=4JYUo9WKkao

That' snot a great video actually, I watched it the other day and he makes a lot of incorrect assumptions. His other videos aren't that bad but it's one thing to analyze a company going back with hindsight than a current one, but yeah a lot of what that video assumes is happening is wrong.

TMNT_Guy
10-03-2017, 10:08 PM
That' snot a great video actually, I watched it the other day and he makes a lot of incorrect assumptions. His other videos aren't that bad but it's one thing to analyze a company going back with hindsight than a current one, but yeah a lot of what that video assumes is happening is wrong.
What's wrong with that video? Just asking so I don't go around spreading wrong facts.

sdp
10-03-2017, 11:13 PM
well you made me watch it again, that video is a mess, watch it again and see how he chooses words because he knows he's filling in a lot of gaps and doesn't have the studies to understand it, he covers himself by saying "it's hard to see in the present", Leveraged Buyouts are also not necessarily a bad thing. He talks about Babies are us as if it somehow has some type of naming issue which couldn't be further from the truth and was in fact more important than TRU itself saleswise. Thing is he is not on the "inside" either.

He's not wrong in all of the things he says but he just misinforms all those people who watched it with his guesses. The thing is he misses the biggest point which is sales of Babies R Us slowing down, mostly due to competition from the internet, target, & Walmart. Toys have been selling less and less but that's not the biggest factor, sales of toys were not a big concern. So yeah, that video mostly angered me since he tries to come off as being in the know while covering his ass in almost every way possible through out it.

There were plenty of articles about it and he does seem to do research but he totally missed the mark, I guess he's just used to analyzing companies that are already dead. Coldfusion and another youtuber do the whole Armchair CEO thing a bit better. Also be wary of FAKE news, I think it was the USA today that was reporting that AR was TRU's new bet to get out of Bankrupcy which is all false since that had been in the works for over a year but that doesn't get clicks so you know, FAKE news gotta FAKE news.