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Amazon Has Considered Buying Some Toys ‘R’ Us Stores

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

#91

Post by Notorious_BLT »

Man it's sad to see them go. I WISH Amazon would buy them and open them back up as toy stores, but that's a pipe dream.

I'm something of a toy collector, and I feel like much more could have been done to save Toys R Us. I used to go to the Toys R Us in Chicago (the only one) every once in a while, when the mood struck me. They always seemed to get new releases far too late, and it was always dead quiet, and empty even on what should have been peak hours. I eventually gave up on them and bought everything online, (from Amazon, most of the time) as they rarely even had what I was looking for when I bothered to make the trip.

There are only like... 3 other toy stores in the city that carry collector-focused lines, and they are smaller, independent stores that manage to stay in business by trading in both new releases and older toys, both online (through ebay) and in their brick-and-mortar locations.

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

#92

Post by rando444 »

lbotos wrote: post #50
jobu wrote: post #27

Earlier quoted context omitted.

> 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…

Isn't that the nature of a business in America? It acts as a "corporate veil" and as long as you aren't using business funds inappropriately, the business is the "last stop".

The person you are replying to is making a point about leveraged buyouts and how they can be used by unscrupulous wall street types to milk and destroy an otherwise profitable industry.

https://www.rollingstone.com/politics/news/greed-and-debt-th...

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

#93

Post by km3k »

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.

Amazon customer support helps you select items to buy?

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

#94

Post by km3k »

freehunter wrote: post #60
jpindar wrote: post #19

Earlier quoted context omitted.

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.

I agree, but they were out of the parts business well before Arduino and Raspberry Pi were a thing. The last Radio Shack in my area that stocked resistors closed in 2006. There's none near me now, but since ~2000 they'd been mostly phone stores that also carried the occasional batteries and cables.

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

#95

Post by vha32oiwe »

stupandaus wrote: post #55
jobu wrote: post #27

Earlier quoted context omitted.

> 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.

Leveraged buyouts are basically ponzi schemes designed to use recurring revenue to pay back debtors, rather than the usual scheduled lump sum payout down the road.

They were tweaked to work on a different time scale.

The idea they can get some distance to avoid scrutiny.

In a lot of cases, the debtors are also the owners of the firm that initiated the leveraged buyout. They load the target up with debt, can't make the payments, and then they collect as debtors.

See Sears and their current CEO for exactly that model. It's been going on in retail for years. They're all getting boned hard though thanks to Amazon gutting brick-n-mortar retail. OOPS.

Of course the real people being screwed are the folks on main street.

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

#96

Post by CodeCube »

LandoCalrissian wrote: post #28
jpindar wrote: post #19

Earlier quoted context omitted.

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.

yep, my local radio shack, in the end, started to start stocking some interesting stuff ... and they had a series of drawers that had a variety of resistors, leds, and other such things that you could pick through. But as you said, too little too late. They could have taken the lead on the maker movement, given that they had the infrastructure in place ... but despite them having this stuff, the workers knew little to nothing anytime I asked them a question, they were just there to take the money at POS and restock the shelves :(

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

#97

Post by gebeeson »

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.

I had so hoped that at one point Fry's would buy out all the Radio Shack locations and make them out to be Frontier Fry's Locations that was more tuned to hyper local Maker Scenes.

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

#98

Post by InclinedPlane »

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…

Once more, for those in the back:

Toys R Us was profitable. Period.

They were acquired by predatory capital companies (Bain Capital) via a leveraged buyout which loaded them down with huge debt repayments. The new owners extracted massive amounts of money from Toys R Us and then let them die as they were crushed under their debt burden.

This is not a story of a company that failed to keep up with modern times, Toys R Us had a long profitable life ahead of it. This is a story of corporate predation, one company killing another in order to feast on the carcass. Bain Capital basically pocketed hundreds of millions of dollars while leaving Toys R Us customers and employees as well as private banks holding the bag.

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

#99

Post by opmac »

s73v3r_ wrote: post #69
opmac wrote: post #59

Earlier quoted context omitted.

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…

"Bain doesn't get off the hook here with zero losses." They make the company pay them dividends while saddling the company with their debt. "The debtors however get screwed even further... most if not all of them get absolutely nothing." And yet, they keep lending to these vultures. I have no sympathy.

> They make the company pay them dividends while saddling the company with their debt.

Yes that is true. Is the sum of dividends over X years >= the amount of equity wiped out in a Chapter 7 liquidation? Impossible to say... the company is private.

> They make

They didn't make them do anything. They bought the company... they can do what they want as owners. That's just how this game works.

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

#100

Post by fullshark »

kirykl wrote: post #89
fullshark wrote: post #57

Earlier quoted context omitted.

He almost destroyed JC Penney

JC Penney had failed before they brought him in. It's now just slowly dying. They've even had to sell off their HQ http://fortune.com/2017/01/03/jcpenney-headquarters-debt/

Perhaps, but there was almost no positive returns from his ideas there. He seemed to fundamentally misunderstand the JC Penney customer. I don't think it was a case of abandoning a good plan due to lack of patience, the entire strategy (eliminate sales, make it like a mini mall with its own sub stores) seemed ill conceived and was a disaster.
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