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Toys ‘R’ Us Plans Bankruptcy Filing Amid Debt Struggle

bloomberg.com

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Re: Toys ‘R’ Us Plans Bankruptcy Filing Amid Debt Struggle

#241

Post by falsedan »

michaelt wrote: post #236
falsedan wrote: post #231

Earlier quoted context omitted.

I dare you to try telling a 3-year-old who's winding up a tantrum because they want the airsoft pistol from the other aisle that they have to wait 3 days for the sensible age-appropriate & mentally-stimulating toy to arrive.

If trips to a toy store lead to tantrums, that sounds like an argument /against/ shopping there, not an argument /for/ shopping there.

My argument is against online price-matching being a suitable way of shopping for parents with young children, not against visiting toy stores. I see I wasn't clear that: taking your attention off your children to focus on your phone in an area with a high number of distracting items will likely lead to a situation where you need to reassert parental control.

Did you know? The 2-year-old will tantrum regardless where you are, and buying online means you don't have a quick out on hand (either getting the toy almost immediately after calming down and ensuring enough separation between the tantrum and getting the toy, or some stopgap alternative toy that's a tenth of the price).

Re: Toys ‘R’ Us Plans Bankruptcy Filing Amid Debt Struggle

#242

Post by ComputerGuru »

slapshot wrote: post #98
guelo wrote: post #89

Earlier quoted context omitted.

Which is a great way for vulture capitalists to steal money from a company. I've seen it before: 1. Take out a giant loan and use it to buy a company by offering slightly more than it's worth. 2. Transfer the loan to the company's books. 3. You now own a company and it didn't cost you anything! You get to be the CEO or sit on the board. And take nice fat bonuses. 4. The company now has to pay off the loan it used to…

Because it doesn't work that way? The banks that fund the "giant loan" in #1 put in covenants preventing any payments to the equity investor (who has to put in their own money) from paying out on the equity until all the debt has been paid off. This is not their first rodeo. The nature of the covenants varies a lot between industries, but the general rule is that the banks won't lend into the deal unless they are gua…

You’re not wrong, but neither is the parent. The way LBO works is you pick a juicy target with a lot of cash. Then you raise equity from others in your still-worthless company. Then you take out a loan for up to said company’s cash reserves plus the cash you’ve raised. Guaranteed win for sleazy VC and bank. Company is screwed, but their CEO probably got a nice bonus for negotiating the buyout plus a hefty separation package.

Re: Toys ‘R’ Us Plans Bankruptcy Filing Amid Debt Struggle

#243

Post by ComputerGuru »

rb808 wrote: post #69
pm90 wrote: post #56

Earlier quoted context omitted.

I just don't understand the people/institutions that give loans to such entities when a simple analysis would show how burdened by debt they are... are these investors really that stupid to loan money at unsustainable rates?

2005 was a different age, both in the shopping world and finance.

LBOs still happen, unfortunately.

Re: Toys ‘R’ Us Plans Bankruptcy Filing Amid Debt Struggle

#244

Post by nsxwolf »

michaelt wrote: post #236
falsedan wrote: post #231

Earlier quoted context omitted.

I dare you to try telling a 3-year-old who's winding up a tantrum because they want the airsoft pistol from the other aisle that they have to wait 3 days for the sensible age-appropriate & mentally-stimulating toy to arrive.

If trips to a toy store lead to tantrums, that sounds like an argument /against/ shopping there, not an argument /for/ shopping there.

You are obviously not a parent; you do not avoid trips to the toy store indefinitely.

Re: Toys ‘R’ Us Plans Bankruptcy Filing Amid Debt Struggle

#245

Post by bb611 »

CodeTheInternet wrote: post #44
devmunchies wrote: post #8

Earlier quoted context omitted.

A place to try before you buy on amazon.

I used to go to Borders constantly, like a hangout. As Amazon grew, I found myself doing exactly this: going to check out the latest releases, flip through the pages, pull out my phone and check Amazon prices. 99% of the time it was cheaper there. Add the book to a wishlist or my cart, put the book back on the shelf and leave empty-handed. I felt horrible when Borders went under, but I do the same at B&N. If brick-n-…

> If brick-n-mortar want to compete with Amazon, they need to compete with their prices. However, they also have a lot of additional overhead that makes it untenable.

Seems like a contradictory statement.

The economic message you're sending is that you gain no value from being able to see a book in person. The market will respond in kind.

Re: Toys ‘R’ Us Plans Bankruptcy Filing Amid Debt Struggle

#246

Post by nuna »

SilasX wrote: post #110
atourgates wrote: post #58

Earlier quoted context omitted.

Toy stores are a _great_ example of opportunity for brick and mortar. Just like book stores, they operate in a space where curation, discovery and the physical experience adds real value. The town I grew up in has a great independent toy store, and I make it a point to shop there every time we're in town. Every time I find something unique that I would have never looked for on Amazon, and often I'm hooked by the tact…

>Toy stores are a _great_ example of opportunity for brick and mortar. Just like book stores, they operate in a space where curation, discovery and the physical experience adds real value. Not anymore. Customers just use them as a free showroom and then buy it cheaper off Amazon.

I bought a $80 item from a toy store this week, the price was the same as Amazon and I was glad not to deal with delivery, boxes and packaging. At another toy store i picked up a llama llama book, but it was $17 in store, and only $10 on Amazon. I didn't get the book. $7 is worth waiting and dealing with boxes

Re: Toys ‘R’ Us Plans Bankruptcy Filing Amid Debt Struggle

#247

Post by le-mark »

dsfyu404ed wrote: post #178
bluedino wrote: post #132

Earlier quoted context omitted.

You want that toy? Here, watch a YouTube video of someone else playing with it until Amazon delivers it tomorrow.

Better yet try saying "no".

I don't know why, but my kids do really well in this situation. We often say "maybe for your birthday" or "we'll add that to Santa's list" or "we're not buying toys today". They might make a little fuss, but so far it's been pretty easy. We also do the thing where you repeat back what they said to them, like "oh you want that don't you? I know, but not today".

Edit oh and they are pulled out of the store if they don't behave, so there's that too.

Re: Toys ‘R’ Us Plans Bankruptcy Filing Amid Debt Struggle

#248

Post by pbhjpbhj »

lostapathy wrote: post #181
tyingq wrote: post #172

Earlier quoted context omitted.

There's a lot here I agree with, but... >You go to Home Depot for expertise as much as for parts Has not been my experience. Ace hardware is a little better, but not much. I suppose sometimes they get lucky and a knowledgeable retiree is willing to work for those wages.

Ace Hardware is a cooperative, not a chain, or even a franchise system. As such they vary a lot , and it seems on average they are getting worse. We used to have a really good Ace chain around here, with a proper hardware section and quality tools. They now only stock super common hardware, not the stuff I'd go to a specialty store for, and a lot of really garbage tools. And they certainly don't have any experts anym…

I don't understand why it being a cooperative makes for wide variance in staff quality. Do US Americans not like working in co-ops? What is it about profit sharing that causes the variation, in UK cooperatives seem to be more liberal and offer better working conditions but their recruitment seems pretty much inline with other forms of corporation.

Can you offer any further insight?

Perhaps the demise of this particular store (chain) is orthogonal to their cooperative status but you're assuming a causality?

Re: Toys ‘R’ Us Plans Bankruptcy Filing Amid Debt Struggle

#249

Post by pbhjpbhj »

alsetmusic wrote: post #187
Pxtl wrote: post #156

Earlier quoted context omitted.

I think the place brick and mortar seems to do well is where the store adds value over just selling merch. You go to Home Depot for expertise as much as for parts. You go to a local boardgame store for recommendations and events. You go to a toy store to get your hands on them and leverage staff expertise and curated inventory. The only big problem with this approach is showrooming. Toys r us or best buy carry bad pr…

> Toys r us or best buy carry bad products and are staffed by the lowest bidder. They offer no value over Amazon, so Amazon makes them worthless. I would think that instant gratification is of high value when shopping for toys with a child.

Toys R Us is a place to look at toys mainly though IMO. They're all boxed with wire and plastic holding them in place. Lots of expensive stuff in plastic with a "try me" button. Not really instant gratification like a traditional toy store (Hamleys, say) where you can play with lots of the toys before you choose.

Re: Toys ‘R’ Us Plans Bankruptcy Filing Amid Debt Struggle

#250

Post by throwawaymanbot »

product50 wrote: post #39

Though this may have something to do with Amazon (and retail generally trending online), it does appear that the big culprit here were Bain Capital (and its partners) who took it private in 2005 via leverage buyout and ladened Toys r Us balance sheet with untenable debt from thereon. Apparently, they were paying $500M in interests alone per year vs. reinvesting capital in growth of their offline stores or online reta…

There are quite a few instances of Bain Capital types loading debt upon a corporate structure. Destructive Capitalism. Total Shame.
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