Goodbye Geoffrey: Toys 'R' Us Prepares For Shutdown
You’ve seen them around. Perhaps you’ve ventured in once or twice to browse the aisles of bright packaging and impossible promises.
Toys “R” Us has been a staple in American childhood for decades, and many of us probably have fond memories of trips to the toy superstore.
But the company in particular, and really the whole toy industry, has taken a major hit.
Both kids and the shopping environment have changed over the years, resulting in some rough times for the industry.
Many people now shop online, and sites like Amazon offer more variety, lower cost, and easier access than physical locations.
Children are different now, too. If you see a kid walking around and totally absorbed in something, chances are good that it’s an electronic device of some sort.
Most traditional toy-makers are feeling this pinch. Shares for both Hasbro and Mattel have fallen 3.5 percent and 7 percent, respectively.
Lego has also announced that, for the first time in 13 years, they have noticed a drop in sales. Kids simply aren’t playing with physical toys as much as they used to.
Mattel and Hasbro both counted on Toys “R” Us for about 10 percent of their sales. Losing that demand is going to hurt. WalMart accounts for the largest single chunk of their sales, at about 20 percent.
Some have suggested that change is on the horizon, with the possibility of a new direction for these two major toy companies or perhaps a merger of some sort.
But Toys “R” Us itself is seemingly out of options. It was unsuccessful in finding a buyer to turn things around.
The holidays, usually so promising for toy manufacturers, did not make much of a dent and were certainly not enough to lift the company out of the red.
They had already announced that they were closing 184 stores in the U.S., but that doesn’t look like it’s going to do enough.
It was unable to strike up a deal with lenders and has gone bankrupt. They’re now looking at closing all stores across the U.S.
Their bankruptcy hearing is scheduled for Monday in Richmond, Virginia. More details should be available at that point.
One thing is for sure: our shopping and buying habits have changed drastically, and they will continue to change the retail environment.
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