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Amazon Has Considered Buying Some Toys ‘R’ Us Stores

bloomberg.com

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Re: Amazon Has Considered Buying Some Toys ‘R’ Us Stores

#21

Post by mox1 »

vinhboy wrote: post #11

I think Amazon should do it. I personally believe Toys R Us just missed an opportunity to run a proper business. They have a ton of retail space, but every time I've been there, it's run like Walmart. Shit everywhere, no one to help you find anything, etc... There's nothing suburban parents like me want more than an indoor play space for my kid (for extremely hot or cold days). If they properly utilized their store a…

Their current business model is (was?) to price everything in the store 5-20% higher than elsewhere, but then offer coupons, sales, etc. to offset that.

When our daughter was born we price compared them for a lot of big ticket items, but ultimately just bought online or at Target / Walmart.

A few times a year they have a good deal on something (again with coupons) so we purchase, but walking into the store blind shopping is basically just paying a 15% corporate convenience fee.

If they were price competitive with others, I would have stopped in there a lot more, but oh well.

Re: Amazon Has Considered Buying Some Toys ‘R’ Us Stores

#22

Post by daxorid »

vinhboy wrote: post #11

I think Amazon should do it. I personally believe Toys R Us just missed an opportunity to run a proper business. They have a ton of retail space, but every time I've been there, it's run like Walmart. Shit everywhere, no one to help you find anything, etc... There's nothing suburban parents like me want more than an indoor play space for my kid (for extremely hot or cold days). If they properly utilized their store a…

Maybe their operations were suboptimal, I don't know - but the PRIMARY reason they went under is because Bain Capital conducted an LBO, sucked a ton of value out from coupon payments, pushed its own debt obligations back onto Toys R Us, then left it to die.

Re: Amazon Has Considered Buying Some Toys ‘R’ Us Stores

#23

Post by xapata »

gedy wrote: post #18
vinhboy wrote: post #11

I think Amazon should do it. I personally believe Toys R Us just missed an opportunity to run a proper business. They have a ton of retail space, but every time I've been there, it's run like Walmart. Shit everywhere, no one to help you find anything, etc... There's nothing suburban parents like me want more than an indoor play space for my kid (for extremely hot or cold days). If they properly utilized their store a…

Issue is, a company does that and then parents still search and buy the toy for cheaper on Amazon from their phone. I have family members who run a small retail store with excellent inventory and service, and they barely scrape by due to people show rooming. They are not in toys, but they simply cannot compete on price, as Amazon, etc sells it cheaper than they can buy from the suppliers.

If Amazon sells it cheaper, they could act somewhat as an Amazon affiliate. Or at least buy from Amazon instead of their more expensive suppliers.

Re: Amazon Has Considered Buying Some Toys ‘R’ Us Stores

#24

Post by MadBohr »

gedy wrote: post #18
vinhboy wrote: post #11

I think Amazon should do it. I personally believe Toys R Us just missed an opportunity to run a proper business. They have a ton of retail space, but every time I've been there, it's run like Walmart. Shit everywhere, no one to help you find anything, etc... There's nothing suburban parents like me want more than an indoor play space for my kid (for extremely hot or cold days). If they properly utilized their store a…

Issue is, a company does that and then parents still search and buy the toy for cheaper on Amazon from their phone. I have family members who run a small retail store with excellent inventory and service, and they barely scrape by due to people show rooming. They are not in toys, but they simply cannot compete on price, as Amazon, etc sells it cheaper than they can buy from the suppliers.

People will generally pay a premium for better service, but in the case of retail, it's usually hard to beat the service of "instant purchase with free two day delivery to my doorstep". I for one, very rarely buy something w/o checking if it's cheaper on Amazon (or some other online retailer) first. It's gotta be a tough market that's for sure.

Re: Amazon Has Considered Buying Some Toys ‘R’ Us Stores

#25

Post by jimmy1 »

tonyedgecombe wrote: post #14
vinhboy wrote: post #11

I think Amazon should do it. I personally believe Toys R Us just missed an opportunity to run a proper business. They have a ton of retail space, but every time I've been there, it's run like Walmart. Shit everywhere, no one to help you find anything, etc... There's nothing suburban parents like me want more than an indoor play space for my kid (for extremely hot or cold days). If they properly utilized their store a…

Shit everywhere, no one to help you find anything, etc... It would fit right in with Amazons style of business then.

Amazon has a search engine, recommendations, and 24/7 customer support to help you find what ever you need.

Re: Amazon Has Considered Buying Some Toys ‘R’ Us Stores

#27

Post by jobu »

vinhboy wrote: post #11

I think Amazon should do it. I personally believe Toys R Us just missed an opportunity to run a proper business. They have a ton of retail space, but every time I've been there, it's run like Walmart. Shit everywhere, no one to help you find anything, etc... There's nothing suburban parents like me want more than an indoor play space for my kid (for extremely hot or cold days). If they properly utilized their store a…

> I personally believe Toys R Us just missed an opportunity to run a proper business.

Toys R Us has been struggling to pay off $6 billion in debt from the Bain Capital takeover in 2005. They didn't have the capital or the margins to invest in maintaining their stores, let alone competing with Amazon.

Buying a company with debt and then forcing that company to pay off that debt is fairly common, but for some reason it surprises me that it's actually legal. Why isn't Bain forced to pay off the debts when the company goes under?

https://www.forbes.com/sites/walterloeb/2018/03/19/bain-capi...

Re: Amazon Has Considered Buying Some Toys ‘R’ Us Stores

#28

Post by LandoCalrissian »

jpindar wrote: post #19
CodeCube wrote: post #10

Earlier quoted context omitted.

This is part of the reason that IMO a lot of retail is failing ... customers don't want or need a static display of inventory; they can easily get that from their already-installed Amazon app. Retail needs to evolve to be an event destination ... a place that gives the consumer a _reason_ to get out of the house and go there. A place where they can experience something other than just simple consumption. Obviously, n…

Radio Shack should have tried to evolve into maker spaces rather than cell phone stores.

They kind of did at the very end. They were at least dedicating some space to it, but I think it was too little too late.

Re: Amazon Has Considered Buying Some Toys ‘R’ Us Stores

#29

Post by ceejayoz »

MadBohr wrote: post #17
vinhboy wrote: post #11

I think Amazon should do it. I personally believe Toys R Us just missed an opportunity to run a proper business. They have a ton of retail space, but every time I've been there, it's run like Walmart. Shit everywhere, no one to help you find anything, etc... There's nothing suburban parents like me want more than an indoor play space for my kid (for extremely hot or cold days). If they properly utilized their store a…

It's important to note that a lot of the failure of Toys R Us has to do with private equity buyout rather than a poor business model. Of course, their business model was flawed, but remember that Toys R Us was bought in 2005, and the toy market was MUCH simpler back then. Amazon was hardly the player it is now. The private equity firm then loaded them up with crippling debt. Move forward a few years, and enter Amazon…

Cite for the above: https://www.bloomberg.com/news/articles/2018-03-16/who-kille...

Buy company. Take out massive debts on company's books. Withdraw hundreds of millions in "fees". Let company collapse. Rinse, repeat.

Re: Amazon Has Considered Buying Some Toys ‘R’ Us Stores

#30

Post by MadBohr »

ceejayoz wrote: post #29
MadBohr wrote: post #17

Earlier quoted context omitted.

It's important to note that a lot of the failure of Toys R Us has to do with private equity buyout rather than a poor business model. Of course, their business model was flawed, but remember that Toys R Us was bought in 2005, and the toy market was MUCH simpler back then. Amazon was hardly the player it is now. The private equity firm then loaded them up with crippling debt. Move forward a few years, and enter Amazon…

Cite for the above: https://www.bloomberg.com/news/articles/2018-03-16/who-kille... Buy company. Take out massive debts on company's books. Withdraw hundreds of millions in "fees". Let company collapse. Rinse, repeat.

NY Times also has a good article on it: https://www.nytimes.com/2018/03/15/business/toys-r-us-bankru...
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