Once a magical toy paradise teeming with excited children, Toys “R” Us has now plunged into the state of bankruptcy, owing a total of $7.9 billion to over 100,000 creditors. After seven decades of operation, the company decided to liquidate all 735 of its stores in the US in addition to closing down all the Toys “R” Us chains in the UK.
“After hearing the unfortunate news of Toys ‘R’ Us closing down across the US, I became all sentimental because my childhood is unimaginable without Toys “R” Us,” Catherine Cho (11) said. “I still remember visiting the store with my parents on special days like my birthday or on Christmas.”
The downfall of Toys “R” Us boils down to a variety of issues, the greatest of which is financial difficulty. Financial conditions for Toys “R” Us deteriorated rapidly after its failure to adapt to cultural change and the contrasting success of e-commerce retailers like Amazon. When the company filed for Chapter 11 bankruptcy—in which the debtor produces a blueprint for the reorganization and revival of its business—last September, it had accumulated about $5 billion in debt. Moreover, both analysts and consumers remarked that Toys “R” Us no longer had any unique experiences to offer to its customers. Such developments were especially detrimental to a company that marketed bringing “the magic of play to life.”
“When I’m shopping online for groceries or for birthday presents or for whatever else, it’s nice to only have to go to one website,” said Morgan Miller, AP Micro/Macro Economics teacher. “Having a specialty [like Toys ‘R’ Us]only works on a very local level, where you know the person running the store and it’s a fun experience for you to go. Toys ‘R’ Us is a big multinational corporation, with nameless, faceless people that are replaceable in charge, and it can’t really replicate that special experience.”
Toys “R” Us’ tragic demotion from a magnate of the toy industry to a debt-laden failure prompted billionaire CEO Isaac Larian to start a campaign to revive the bankrupt company. Larian believed Toys “R” Us to be the keystone of the toy industry and hoped to bring about its reemergence as an eminent toy retailer. He and other investors amassed $200 million to purchase the company’s stores and encouraged the public to participate in a GoFundMe campaign to raise $800 million.
Despite such efforts, it seems that Toys “R” Us is bound to meet its demise in America. According to USA Today, crowdfunding money fell tremendously short of Larian’s initial objective, amounting to a meager $59,000 raised over the course of three weeks. With the expansion of online markets and the continuation of technological development, chances of resurrection look slim for a brick-and-mortar company like Toys “R” Us.
“With the toy industry rapidly developing ways to integrate with the increasingly technological world and advertise its products through a stable online platform, the Internet, and the television, the toy industry does seem fine for the next couple of years,” said Emily Bae (10), FBLA member. “For instance, according to the top toy trends of 2018 announced at the recent New York Toy Fair, more affordable, user-friendly virtual and augmented reality toys, interactive and buildable robots with new features, and drones seem to be carrying us into the next generation for now. Even in the absence of Toys ‘R’ Us, the toy industry may roll along pretty well with new, dominant companies emerging such as Fisher-Price Barbie, Nerf, and Mattel. Regardless, it will be sad to see our companion, Toys ‘R’ Us, disappear from the toy industry.”