Toys R Us Could Seek Bankruptcy Protection to Deal With Its Crushing Debt

rwsandiego
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RIP Charles Lazarus, Toys R Us Founder

Post by rwsandiego »

Charles Lazarus, founder of Toys R Us, has died. The timing is simply amazing.

Here's a story from CNN Money complete with him posing with a toy Toys R Us truck.

If you'll excuse me, I'm going to grab my teddy bear and play with my Tonka trucks now.

RIP.
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Re: Toys R Us Could Seek Bankruptcy Protection to Deal With Its Crushing Debt

Post by storewanderer »

Cannot believe the timing...
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Re: Toys R Us Could Seek Bankruptcy Protection to Deal With Its Crushing Debt

Post by pseudo3d »

As tragic as that is (I imagine news of TRU's liquidation and his death are not a coincidence, even if he was elderly), I'm a bit surprised he was alive until now. Typically it seems that as long as a founder is still alive, they were the ones to steer the company in the right direction even if they weren't involved in day to day operations. It's like Albertsons and Wal-Mart before and after the deaths of their founders. When Walton died, his heirs abandoned Walton's ideals to appeal to the lowest common denominator, and when Albertson died, the company lost sight of the "low price/high quality" store to "expansion at any cost", which sadly they continue to push the latter even though the first time ended in a disaster.
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Re: Toys R Us Could Seek Bankruptcy Protection to Deal With Its Crushing Debt

Post by arizonaguy »

pseudo3d wrote: March 23rd, 2018, 8:27 pm As tragic as that is (I imagine news of TRU's liquidation and his death are not a coincidence, even if he was elderly), I'm a bit surprised he was alive until now. Typically it seems that as long as a founder is still alive, they were the ones to steer the company in the right direction even if they weren't involved in day to day operations. It's like Albertsons and Wal-Mart before and after the deaths of their founders. When Walton died, his heirs abandoned Walton's ideals to appeal to the lowest common denominator, and when Albertson died, the company lost sight of the "low price/high quality" store to "expansion at any cost", which sadly they continue to push the latter even though the first time ended in a disaster.
While he wasn't a founder, I believe Kroger is suffering the same problem after David Dillon retired. Dillon's great-grandfather founded a grocery store chain (Dillon's) that was eventually absorbed into Kroger. In a way, it was still the family business. Now that Dillon is gone Kroger seems to have lost its sense of direction.
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Re: Toys R Us Could Seek Bankruptcy Protection to Deal With Its Crushing Debt

Post by wnetmacman »

pseudo3d wrote: March 23rd, 2018, 8:27 pm As tragic as that is (I imagine news of TRU's liquidation and his death are not a coincidence, even if he was elderly), I'm a bit surprised he was alive until now. Typically it seems that as long as a founder is still alive, they were the ones to steer the company in the right direction even if they weren't involved in day to day operations.
I don't believe Mr. Lazarus had been involved with the operations of the company for some time. He was 93. Sam Walton was only 74 at the time of his death, and Joe Albertson stepped down as chairman at 70. I believe, though I can't find enough evidence at the moment, that Lazarus stepped down at a similar time in his life.
pseudo3d wrote: March 23rd, 2018, 8:27 pm Typically it seems that as long as a founder is still alive, they were the ones to steer the company in the right direction even if they weren't involved in day to day operations. It's like Albertsons and Wal-Mart before and after the deaths of their founders. When Walton died, his heirs abandoned Walton's ideals to appeal to the lowest common denominator, and when Albertson died, the company lost sight of the "low price/high quality" store to "expansion at any cost", which sadly they continue to push the latter even though the first time ended in a disaster.
Actually, most of Walmart's explosive growth took place (especially internationally) after Sam's death. When he died, Supercenters were still an experiment (there were only 12 plus 4 Hypermart USA). When Joe Albertson died in 1993, the only blunders they appeared to make were extreme expansion at any cost, which was their biggest mistake.

Toys R Us was largely a victim of their own complacence. They believed that if they had the largest selection of toys available, folks wouldn't go to Walmart or Amazon. And the venture capitalists didn't help. They were all wrong, and now we're losing an icon in retailing because of it. Hopefully someone can raise the cash to bring it back.
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Re: Toys R Us Could Seek Bankruptcy Protection to Deal With Its Crushing Debt

Post by rwsandiego »

wnetmacman wrote: March 24th, 2018, 7:02 am...I don't believe Mr. Lazarus had been involved with the operations of the company for some time. He was 93. Sam Walton was only 74 at the time of his death, and Joe Albertson stepped down as chairman at 70. I believe, though I can't find enough evidence at the moment, that Lazarus stepped down at a similar time in his life...
According to This article in Fortune he stepped down as CEO in 1994 and as executive chairman in 1998.

I only had a few recent Toys R Us experiences (I don't have kids and my niece/nephew live in a different state) and they were not good. The stores could have been a Home Goods, Michael's, or Office Max. There was no differentiation from any other store. If I was a kid, I wouldn't have asked my parents to take me there. I couldn't find the gift I was looking for and went to Target, where an associate helped me and seemed like he was having fun while doing so.

My brother and sister-in-law didn't take their kids there because the experience was no different than buying toilet paper or rock salt at Walmart. When they took the kids to the Target/Walmart toy department an employee would invariably engage the kids and at TRU they were nowhere to be found. Guess where they bought their toys?

Thinking about the ills of brick-and-mortar retail brings me back to an experience I had in 2000/2001 at the Horton Plaza Macy's in San Diego. They had some men's sweaters on sale and I couldn't find them. When I flagged down a sales associate she pointed off in the distance and huffed "the sale stuff is over there." I left and walked into Nordstrom, where I was greeted by an associate who was in a similar age bracket as the one at Macy's (20-something). When I said I was looking for sweaters (and I was standing next to a display of expensive sweaters) she said "Follow me. We have some amazing finds on the sale rack." and proceeded to locate a half-dozen sweaters in my size. I think I bought four sweaters plus a pair of shoes that day. She seemed to enjoy finding me deals.
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Re: Toys R Us Could Seek Bankruptcy Protection to Deal With Its Crushing Debt

Post by Super S »

rwsandiego wrote: March 24th, 2018, 9:53 am

I only had a few recent Toys R Us experiences (I don't have kids and my niece/nephew live in a different state) and they were not good. The stores could have been a Home Goods, Michael's, or Office Max. There was no differentiation from any other store. If I was a kid, I wouldn't have asked my parents to take me there. I couldn't find the gift I was looking for and went to Target, where an associate helped me and seemed like he was having fun while doing so.
Sounds a lot like me. I also have no kids but have occasionally purchased gifts for kids of my friends. The last time I visited a Toys R Us several years ago it seemed like it was on a skeleton crew and the only employees to be found were at the registers up front. It was so dead and depressing inside that it would even make a Kmart or Sears of today look busy and cheerful. It just barely seemed to have the appearance of a toy store. As far as selection, stores like Walmart and Target actually had a better selection on some items.

The specialty retailers seem to be losing sight of the specialty part. Toys R Us is far from the only chain like this unfortunately.
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Re: Toys R Us Could Seek Bankruptcy Protection to Deal With Its Crushing Debt

Post by babs »

When private equity leaves you $7 billion in debt with $500 million in annual payments, that's not much left to pay extra store staff and upgrade the shopping experience. Blame Mitt Romney and his business buddys, not the poor retail managers trying to figure out how to run a store with their hands tied behind their backs.
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Re: Toys R Us Could Seek Bankruptcy Protection to Deal With Its Crushing Debt

Post by pseudo3d »

Reading about TRU, their edge in toys was lost against Wal-Mart twenty years ago, and more interestingly, for a brief time in the early 2000s were the exclusive provider of toys to Amazon.com until the company brought in others citing Toys R Us' failure to carry a sufficient selection, including popular lines. Given that all this happened around the time it went private, I wonder if they could've just let Amazon buy them out back in 2005.
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Re: Toys R Us Could Seek Bankruptcy Protection to Deal With Its Crushing Debt

Post by storewanderer »

babs wrote: March 24th, 2018, 3:46 pm When private equity leaves you $7 billion in debt with $500 million in annual payments, that's not much left to pay extra store staff and upgrade the shopping experience. Blame Mitt Romney and his business buddys, not the poor retail managers trying to figure out how to run a store with their hands tied behind their backs.
I wonder what will happen with a certain large grocery chain that private equity has also put into significant debt, long term. We see how a smaller scale of a similar situation is ending for Winn Dixie...
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