Amazon Has Considered Buying Some Toys ‘R’ Us Stores • Hacker News Board

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

#51

Post by s73v3r_ » Tue, Mar 20, 2018, 4:22 PM UTC

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…

Toys R Us had a proper business. If they didn't get saddled by debt thanks to private equity, they'd still be around.

The private equity practice of saddling the company you're buying with the debt you used to buy it should be banned. There is absolutely nothing worthwhile that comes from it.

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

#52

Post by s73v3r_ » Tue, Mar 20, 2018, 4:26 PM UTC

MadBohr wrote: post #37

olivermarks wrote: post #32

Earlier quoted context omitted.

Taking a corporation private, loading it with billions in debt, starving it of funding and sucking it dry before collapse should be a criminal offense IMO

Unfortunately that's the nature of business. Sometimes it's impossible to predict market situations 10, 15 years out. I doubt anybody at Bain could have predicted in 2005 that Amazon would completely dominate the retail market in 10 years. Also, some responsibility falls on the debtors themselves for taking on potentially risky investments, but there are so many loopholes and gotchas here that I really can't comment…

Excusing this as "the nature of business" is extremely defeatist. We could easily make it so that Bain is back on the hook for these debts, so that they actually care about the outcome of the company.

Keep in mind, Toys R Us had some 20% of the online toy market. And without the debt hanging around their neck, they'd actually have funds to invest in competing.

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

#53

Post by nolok » Tue, Mar 20, 2018, 4:26 PM UTC

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.

But that's the whole point, if both are the same on that aspect, and amazon has a larger catalog size, and I already have evening/next day delivery from amazon anyway, why would I bother going the to the toy store ?

The whole point he was making is, once amazon existed, they failed to compete with it. You're a physical store, you have the possibility to interact with people, offer them things they can't have over the internet, use it. If you don't, you're wasting a lot of money on prime rent.

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

#54

Post by josefresco » Tue, Mar 20, 2018, 4:29 PM UTC

jimmy1 wrote: post #25

tonyedgecombe wrote: post #14

Earlier quoted context omitted.

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.

24/7 customer support: TIL

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

#55

Post by stupandaus » Tue, Mar 20, 2018, 4:29 PM UTC

jobu wrote: post #27

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…

To answer your question, the debt holders take precedence over the equity holders like Bain Capital, and generally being an equity holder and having your equity stake wiped to $0 is not a good outcome for a private equity firm. Bain does have to pay off debts - that is what the liquidation of assets is being done for - to pay off debts to the debt holders. Bain doesn't get to keep those assets.

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

#56

Post by wongarsu » Tue, Mar 20, 2018, 4:34 PM UTC

excalibur wrote: post #49

empath75 wrote: post #6

> Additional stores would give Amazon space to showcase its popular Echo line of devices, which run on the Alexa voice-activated platform. I'm pretty sure they're not going to buy a big box retailer to jam a bunch of echos into it.

Obviously they would sell other things too. But the Echos would likely be front and center. The toys for enriching young children would be replaced by toys for enriching young AI. It's like a private hell designed specifically for a toy store.

The Echo has amazing potential for toys. There's already a large selection of "speaking" toys for boys and girls of all ages, from dolls to board games. All would profit from an Alexa-like technology level. But unless you want your children to order a few pounds of ice cream from Amazon Fresh, you would have to remove the Amazon store part from the kid's Echo (or have much better voice recognition).

It would be beneficial for Amazon in the long run (making people more at ease with voice assistants), but I doubt that this would be the reason for Amazon to buy ToysRUs

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

#57

Post by fullshark » Tue, Mar 20, 2018, 4:34 PM UTC

kirykl wrote: post #34

aswanson wrote: post #20

Earlier quoted context omitted.

Youre right. There's something unclean and bad about the aesthetics...its like stuck in the 1980s. They need someone that can redesign and modernize it. Whoever did that work for Target would probably know what precisely to do.

That Target guy is Ron Johnson, the same one who built Apple retail and tried to help JC Penney

He almost destroyed JC Penney

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

#58

Post by bob_theslob646 » Tue, Mar 20, 2018, 4:36 PM UTC

People are not getting it.

If they are going to get into the business ( acquiring retail space) it will be one that fits into their equation for their last mile problem and be at fire sale prices.

If they choose to purchase retail real estate, it will most likely be a combination of retail/grocery/banking all in one, sort of like a Walmart, but way better experience.

This most likely will be their approach to get baby boomers to shop and to learn how to shop online.

As everyone knows, Amazon loves getting things cheaply and will do so if they can.

> Webvan was an online grocery business that went bankrupt in 2001 after 3 years of operation and was later folded into Amazon.com.

> CNET named Webvan one of the largest dot-com flops in history

> Webvan placed a $1 billion order with engineering company Bechtel Corporation to build its warehouses, and bought a fleet of delivery trucks.

> In 2000, Webvan bought HomeGrocer, a competitor that was also losing money, for $1.2 billion in stock.[11][12] At its peak in 2000, Webvan had $178.5 million in sales but it also had $525.4 million in expenses.

(https://en.wikipedia.org/wiki/Webvan)

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

#59

Post by opmac » Tue, Mar 20, 2018, 4:36 PM UTC

s73v3r_ wrote: post #52

MadBohr wrote: post #37

Earlier quoted context omitted.

Unfortunately that's the nature of business. Sometimes it's impossible to predict market situations 10, 15 years out. I doubt anybody at Bain could have predicted in 2005 that Amazon would completely dominate the retail market in 10 years. Also, some responsibility falls on the debtors themselves for taking on potentially risky investments, but there are so many loopholes and gotchas here that I really can't comment…

Excusing this as "the nature of business" is extremely defeatist. We could easily make it so that Bain is back on the hook for these debts, so that they actually care about the outcome of the company. Keep in mind, Toys R Us had some 20% of the online toy market. And without the debt hanging around their neck, they'd actually have funds to invest in competing.

I don't think you fully understand how this works. Bain doesn't get off the hook here with zero losses. In these bankruptcy situations, equity holds (Bain) usually get their equity stake wiped completely. If they had hundreds of millions/billions of dollars in equity, all of that is now gone. They will recover some of the money from the liquidation of assets however they will immediately use that to pay of their own debts. The debtors however get screwed even further... most if not all of them get absolutely nothing.

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

#60

Post by freehunter » Tue, Mar 20, 2018, 4:37 PM UTC

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.

The number of times I was working on an electronics product and went to Radio Shack to try to find a quick replacement for the resistor or motor I just fried is crazy... and the crazier part is they never once had the part I needed yet I kept coming back because it's the only store I could think of that might have it.

Arduino and Rapsberry Pi should have been their saving grace. Not cheap RC cars.