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Toys 'R' Us Founder Charles Lazarus Dies at 94

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Re: Toys 'R' Us Founder Charles Lazarus Dies at 94

#81

Post by mountainofdeath »

ars wrote: post #72
mgkimsal wrote: post #64

Earlier quoted context omitted.

> It goes back to the year 2000 when Amazon and Toys R Us signed a 10 year agreement that would make Toys R Us the exlusive vendor of toys on Amazon If you go back a bit further, TRU had tried and failed a couple of years to do their own ecommerce. IIRC, both attempts were built on coldfusion, and both failed pretty hard. Not that it was necessarily solely CF's fault, but there were problems (probably a combination o…

> Not that it was necessarily solely CF's fault In the year 2000 ColdFusion was a good choice, so I would not fault them for that. PHP because the better choice around 2004. Interestingly Amazon is/was written in C++, which was a very unusual choice.

The original Amazon executable C and later C++ since there really was no other alternative (this was circa 1994). In the late 90s, Perl started making its way into the front-end.

Either way, the tech stack has little to do with the success of the business.

Re: Toys 'R' Us Founder Charles Lazarus Dies at 94

#82

Post by menacingly »

I've been having an interesting loop of thought about this chain's bankruptcy. Obviously, I'm nostalgic about it, and it's sad, but I am hesitant to say that a national chain going away is some cultural blow.

Given my age, I tend to think it's sad that shopping is less of a social event now. However, I don't think it's a core spiritual need that we go somewhere and spend money together. In fact, I'm not even sure it's a positive.

If people are taking care of their shopping at Amazon, maybe that's more time to do real social stuff and not consumerism masquerading as social stuff.

Re: Toys 'R' Us Founder Charles Lazarus Dies at 94

#83

Post by beaconstudios »

L_Rahman wrote: post #63
DigitalSea wrote: post #38

Earlier quoted context omitted.

>I'd be curious to read more about how they messed it up so badly. They failed to embrace online, that was their downfall. They didn't take it seriously, opting to let someone else handle online for them, one of the largest players in the ecommerce space: Amazon. It goes back to the year 2000 when Amazon and Toys R Us signed a 10 year agreement that would make Toys R Us the exlusive vendor of toys on Amazon. So what…

This is the opposite of correct. Toys R Us core business is profitable and throws off 200 million in profits a year. The reason they went bankrupt is that a private equity company bought them in an LBO and the debt load became unserviceable.

here's what I don't understand - if the equity firm took out a huge loan to buy Toys R Us, how come it's Toys R Us that's going bankrupt? Did they transfer the debt to Toys R Us? I don't understand M&A at all but that seems backwards.

Re: Toys 'R' Us Founder Charles Lazarus Dies at 94

#84

Post by JBReefer »

asmithmd1 wrote: post #55
VLM wrote: post #53

Earlier quoted context omitted.

I think you have confused cause with effect. Debt is cheaper than equity. The purchaser isn't diluting their equity returns as much so in theory they're getting a higher return. Interest is usually slightly higher than usual corporate lending so banks win. The profits should be more positive so the purchasee employees should be better off. So a LBO is a generally good idea other than its much more complicated and onl…

What does this mean: > Debt is cheaper than equity You have to pay interest on a debt, not so with equity. I am having a hard time relating your military and medical analogies to Bain/Vornado buying Toys-R-Us and then saddling it with $Bs in debt.

Equity financing is taxable, debt is not.

It has some weird results.

Re: Toys 'R' Us Founder Charles Lazarus Dies at 94

#85

Post by MarkMc »

smacktoward wrote: post #78
_ea1k wrote: post #73

Earlier quoted context omitted.

If this is true, then why are they closing the stores?

Because with $5 billion in debt, even if they devoted 100% of that $200 million/year profit to paying off the debt, it'd take 25 years for them to pay it all back -- and that's assuming the debt isn't accruing any interest over all that time. Which is why the parent called the debt load unserviceable.

OK so the debt load became unserviceable and the company went bankrupt. But why doesn't the administrator keep the stores running? The creditors would get an asset worth $200 million per year which is better than nothing

Re: Toys 'R' Us Founder Charles Lazarus Dies at 94

#86

Post by _ea1k »

smacktoward wrote: post #78
_ea1k wrote: post #73

Earlier quoted context omitted.

If this is true, then why are they closing the stores?

Because with $5 billion in debt, even if they devoted 100% of that $200 million/year profit to paying off the debt, it'd take 25 years for them to pay it all back -- and that's assuming the debt isn't accruing any interest over all that time. Which is why the parent called the debt load unserviceable.

That still doesn't really make sense. A bankruptcy reorganization would make more sense than a complete shutdown, if the stores themselves were really profitable.
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