They would have survived if they hadn't filled all their aisles with stupid star wars and disney princess stuff. There was a severe lack of creative toys.
Toys ‘R’ Us Didn’t Have to Die
71–80 of 226 posts
Re: Toys ‘R’ Us Didn’t Have to Die
#72I read the whole article, and I didn't really see a convincing argument that it didn't have to die. Sure, it could have eked out a few more years... but it was living on borrowed time. Not only do most people shop online now, most toys are also online. I imagine most parents put money into TV shows, video games, iPhone apps, etc.
There is some scope for a brick and mortar toy store provided they are willing to be double as a pseudo-playcenter. Toy aisles and toy stores are frequently populated by exhausted parents standing around while their children entertain themselves checking out the toys. The kids are happy enough. The parents are content just to have a few minutes to themselves. Toy retailers typically try and dissuade this behavior. Me…
I think there's a pretty good opportunity here for a large format combined playspace/toystore. Build out the toy area around some hands-on demo spaces, and include the normal playspace items nearby with climbing structures and coffee/alcohol for the parents. The key is: charge admission, then credit back the admission price toward the purchase of any new toy.
People are terrible calculating sunk cost, and I'm pretty sure that the pre-paid $15 admission credit makes a $29 toy look like a "steal", even if you could buy it on Amazon for $24. In fact, I'll bet most parents would be hard-pressed to leave the experience without buying something for every child.
Re: Toys ‘R’ Us Didn’t Have to Die
#73Earlier quoted context omitted.
In a few years strip malls will be occupied only by food businesses, pharmacies, check cashing places, and urgent care clinics.
You forgot mattress stores.
No joke. The Freakonomics Podcast had an interesting episode about mattress stores and why there are so many - http://freakonomics.com/podcast/mattress-store-bubble/
Re: Toys ‘R’ Us Didn’t Have to Die
#74Retailing seems to be dying in US irrespective of the company: https://www.bloomberg.com/news/articles/2018-04-17/retail-st... Couple of years ago, one of my friends bought a store at a strip mall. The store was making a loss. And the previously owners were an elderly couple. So my friends thesis was that they weren't exactly tuned into the digital presence business and it was still entirely possible to run a store i…
What I don't get is there are a lot of empty storefronts and places moving that I see... and retailers say the rents are still sky high for those storefronts. Is it really worth the property owners keeping them empty?
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Re: Toys ‘R’ Us Didn’t Have to Die
#75Earlier quoted context omitted.
I'd argue that a toy store, more than any other kind of retailer, is insulated from that, because the store has an little advocate for spending ten dollars extra to buy the product right now with most shoppers. And going to the toy store itself is kind of an activity that I don't think you can replace with online shopping.
Anecdote time: I took my cousin (12) to a toy store once. First it was difficult to get him out of his iPad and get out of home. Second he was completely indifferent to anything in the store. We ended up buying some card games and credit for mobile games. + There aren't many kids anymore.
I don't know why you're being down voted. For better or worse, this is common child behavior now.
Re: Toys ‘R’ Us Didn’t Have to Die
#76Despite the title and the focus on the form of financing, none of the facts in the article even suggested to me that the company would be in any better shape if it had used equity financing rather than debt. It sounds, rather, like an unprofitable business that no one in their right mind would give any more money. If someone thinks they can figure out how to make a workable business out of big box toy stores, it soun…
You're missing the key piece: Toys R Us didn't go into debt for any good business reason, it was bought by a private equity firm and loaded with debt it didn't need. This is how private equity works: 1. A PE firm uses a combination of other people's money (limited partners a.k.a investors) and debt to buy a company. 2. The PE transfers the debt to the company's books. This way, if the company goes bankrupt the PE fun…
> Toys R Us was profitable before it was bought
“In 2004, after years of flat sales and falling profits, the Toys R Us board of directors put the company up for sale” [1]. Then, over “the next five years, sales at Amazon quadrupled to $34 billion”.
Toys ‘R’ Us was bought as meagre profits fell and right before Amazon went for them. Blaming this outcome on the debt load is inaccurate.
[1] https://www.google.com/amp/s/www.marketplace.org/amp/2018/03...
Re: Toys ‘R’ Us Didn’t Have to Die
#77Even with 20% off coupons, Toysrus was often more expensive then Walmart and Amazon...
Re: Toys ‘R’ Us Didn’t Have to Die
#78Retailing seems to be dying in US irrespective of the company: https://www.bloomberg.com/news/articles/2018-04-17/retail-st... Couple of years ago, one of my friends bought a store at a strip mall. The store was making a loss. And the previously owners were an elderly couple. So my friends thesis was that they weren't exactly tuned into the digital presence business and it was still entirely possible to run a store i…
What I don't get is there are a lot of empty storefronts and places moving that I see... and retailers say the rents are still sky high for those storefronts. Is it really worth the property owners keeping them empty?
At least in the UK, they're more likely to get permission to convert to residential if it's long abandoned.
Housing demand in cities is much higher than the normal available space on the boundaries. Carving a big box into 300 apartments more than justifies a couple of years of doing nothing with the place.
Re: Toys ‘R’ Us Didn’t Have to Die
#79The thing that's really lacking to me in online toy stores is, I guess, discoverability. Amazon can give you a list of all the Transformers, or all the Legos, in an instant, and with a bit of prodding it does an acceptable job of showing you the current top-selling toys, but it's impossible to walk down an aisle at Amazon and see something awesome that you've never heard of.
VR could en a thing here for Amazon. Instead of seeing endless lists, just walk down the isles virtually. Maybe accompanied by some cheerful sounds of kids playing in the background to set the mood and incentive to buy.
Re: Toys ‘R’ Us Didn’t Have to Die
#80Earlier quoted context omitted.
There's nothing about the brick & mortar toy space that's inherently living on borrowed time. It was Toys 'R' Us' own mismanagement that doomed it. Toy stores can be a destination. Provide a compelling experience for parents and kids alike. It's easy to imagine a space where kids get to play with toys hands-on, and parents get to judge for themselves whether they think they're appropriate in terms of fun and quality—…
It's easy to rattle off a list of things on HN, but a lot harder to build. If people were invited to come play with toys, they'd just do it for free, enjoy the day, and buy it online after. Your other ideas just seem like... free babysitting? It's not like parents are going to shop for toys while their kids are babysat for free. I agree the stores aren't great now... but they were working with insane debt and a dying…
The LEGO stores have this exact experience, and they seem to be doing well.