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R.I.P. Toys R Us

Old 03-19-18, 04:15 PM
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Re: R.I.P. Toys R Us

Originally Posted by DVD Josh View Post
Even now there are no discounts on LEGO products at TRU while practically everything else is on sale.
That's not indicative of the 2 stores I stopped by at lunch, maybe it's regional. They may be pulling them soon, but there are absolutely some LEGO sets on sale, seems like most of the LEGO City line, a few of the smaller Star Wars, a few various others.

I'd say at most 10-20% of the items in my stores are on some type of sale. And it was not all of any one thing on sale. Several board games (mostly Monopoly), several action figures (most of the Minions stuff on sale, but none of the Star Wars), and various scattered things. Didn't notice anything in the Video Game section on sale. The things that were on sale were around 20% off.

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Old 03-19-18, 04:15 PM
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Re: R.I.P. Toys R Us

Toys R US jus topened in my town last year then said were closing a few months later. Such a waste.

Kmart in my town finally closed last year.

I worry about Barnes & Noble. Some of their stores are really cool.

It's sad to see workers lose jobs, but retail is a pretty tough industry to work in.
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Old 03-19-18, 04:37 PM
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Re: R.I.P. Toys R Us

yeah I think Barnes & Nobles is next :/
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Old 03-19-18, 05:07 PM
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Re: R.I.P. Toys R Us

Originally Posted by fujishig View Post
Yeah, a lot of stuff is going to be pulled so a blowout doesn't devalue the brand. I think pokemon cards are already gone, for instance.

If a lot of companies have not been paid for the merch that is on the shelves I would imagine that the companies will just ask Toy R Us to give back the unsold product instead of clearing it out.

If Toys R Us had already paid for the merch I could see them putting product on sale for clearance prices to try and recoup some monies but if I am Lego, the folks behind Pokemon, Hasbro, etc., and I sent Toys R Us a pallet of product that is unpaid I would simply say hey...here is the freight returns costs, ship it back to us because technically it is not Toys R Us's product to sell.

Even if this is not how things usually work in these situations I suspect that unlike when say Blockbuster went belly up a liquidator cannot simply swoop in to buy a store's inventory for pennies on the dollar because they have to stand in line behind Hasbro, Lego, Electronic Arts, and so on and so forth.
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Old 03-19-18, 09:36 PM
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Re: R.I.P. Toys R Us

Another point with Blockbuster (or any video rental store) is that the vast majority of that merchandise was used ... nothing to take back beyond the revenue sharing titles. They did carry some new product, but it generally wasn’t enough that it was worth messing with the labor costs (for them or the vendors).
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Old 03-19-18, 09:37 PM
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Re: R.I.P. Toys R Us

Originally Posted by The Cow View Post
That's not indicative of the 2 stores I stopped by at lunch, maybe it's regional. They may be pulling them soon, but there are absolutely some LEGO sets on sale, seems like most of the LEGO City line, a few of the smaller Star Wars, a few various others.

I'd say at most 10-20% of the items in my stores are on some type of sale. And it was not all of any one thing on sale. Several board games (mostly Monopoly), several action figures (most of the Minions stuff on sale, but none of the Star Wars), and various scattered things. Didn't notice anything in the Video Game section on sale. The things that were on sale were around 20% off.
Sounds like a regular sale, not a going-out-of-business sale.
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Old 03-19-18, 09:46 PM
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Re: R.I.P. Toys R Us

Originally Posted by nando820 View Post
yeah I think Barnes & Nobles is next :/
Barnes & Noble has ZERO debt. They aren't going to liquidate any time soon. B&N still makes money (or at least, the stores are profitable—they are still paying off past mistakes with Nook via writedowns).

Again, TRU ONLY went BK because of the debt brought on by the leveraged buyout. The other issues—competition from Amazon, changing consumer habits—could be managed without a liquidation, even if it meant smaller or fewer stores. The company would still exist and be profitable.
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Old 03-19-18, 09:47 PM
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Re: R.I.P. Toys R Us

Originally Posted by Abob Teff View Post
Sounds like a regular sale, not a going-out-of-business sale.
I think you are correct. Just looked at their website and the prices are the same there. They didn't have a sale ad (at least around here) this week, I wonder if this was just a previously planned sale. There was a lot more signage for the stuff on sale than what you would see from a normal sale ad.
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Old 03-19-18, 10:56 PM
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Re: R.I.P. Toys R Us

Yeah, 10-20% off Legos is a pretty normal sale for them (and usually brings their above average prices to around MSRP)
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Old 03-20-18, 06:32 AM
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Re: R.I.P. Toys R Us

Originally Posted by woemcats View Post
Barnes & Noble has ZERO debt. They aren't going to liquidate any time soon. B&N still makes money (or at least, the stores are profitable—they are still paying off past mistakes with Nook via writedowns).

Again, TRU ONLY went BK because of the debt brought on by the leveraged buyout. The other issues—competition from Amazon, changing consumer habits—could be managed without a liquidation, even if it meant smaller or fewer stores. The company would still exist and be profitable.
Yeah I still don't understand what is the leverage buyout they got involved in. Anybody can explain it in simple terms?
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Old 03-20-18, 08:51 AM
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Re: R.I.P. Toys R Us

Originally Posted by nando820 View Post
Yeah I still don't understand what is the leverage buyout they got involved in. Anybody can explain it in simple terms?
Basically Toy's R Us used to be on the stock market. A real estate group Vornado and two private equity groups, Bain Capital and KKR. They only did a leveraged buy out though, which means that they put up 20% of the money to buy it back from the stock holders, and the rest has to be paid back. So they only paid the stock holders $1.5 billion(I believe) then they had to pay back the other $5 billion from the stores profits, on top of paying the advisory fees and what not.

I went into my local store recently and I cant lie, I got a little emotional. I have such fond memories of being a TRU kid growing up that no TRU stores is still hard for me to fathom.
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Old 03-20-18, 12:39 PM
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Re: R.I.P. Toys R Us

I worked at Toys R Us in high school and college 20+ years ago. We had at least 20-25 employees for any given shift. The store was always hopping and filled with really knowledgeable people about the products.

The last time I went into a TRU (a month or so ago) I saw exactly one employee - she was at the customer service desk and was also the only cashier.

I am not surprised they tanked. It's been like that for years (even before Target/Walmart/Amazon started cutting into their sales).
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Old 03-20-18, 12:57 PM
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Re: R.I.P. Toys R Us

Originally Posted by robin2099 View Post
Basically Toy's R Us used to be on the stock market. A real estate group Vornado and two private equity groups, Bain Capital and KKR. They only did a leveraged buy out though, which means that they put up 20% of the money to buy it back from the stock holders, and the rest has to be paid back. So they only paid the stock holders $1.5 billion(I believe) then they had to pay back the other $5 billion from the stores profits, on top of paying the advisory fees and what not.

I went into my local store recently and I cant lie, I got a little emotional. I have such fond memories of being a TRU kid growing up that no TRU stores is still hard for me to fathom.
Thanks for the explanation.

My store has been pretty empty most of the time. Now that is closing there are actually a few more people, mostly parents with their kids going one last time
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Old 03-20-18, 02:01 PM
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Re: R.I.P. Toys R Us

I've been in a TRU only a few times over the last 4 years or so. The first was for the board game Othello, which I thought was pretty popular but couldn't find. Staffing was pretty minimal, and there weren't many people in the store at all. The last two times were in the last two years, when TRU already knew they were in trouble, and the staffing was even less, with even less people there. My children are just barely entering a stage when I would take them to pick out their own toys, so they'll never experience the place.

TRU didn't offer anything that couldn't be found online, which is the demise of many B&M stores.
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Old 03-20-18, 02:22 PM
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Re: R.I.P. Toys R Us

But what's fascinating -- or unsettling -- is that overall revenue at Toys "R" Us didn't fall all that much, even during and after the recession. In the 12 months leading up to the LBO, the chain generated $11.2 billion of sales, versus $11.1 billion in the 12 months through October 2017, according to data compiled by Bloomberg. The high was $13.9 billion for the year ended January 2012.

The overarching problem was costs -- and importantly, interest expense on borrowings. By 2007, just before the financial crisis hit, the retailer's interest expense spiked to 97 percent of its operating profit. For the latest reported 12-month period, pretax income was negative $492 million. According to a Bloomberg News story last year, KKR and Vornado previously wrote down their investments in Toys "R" Us to zero, so the bankruptcy didn't affect their earnings.
https://www.bloomberg.com/news/artic...bt-laden-deals

So private investors took a perfectly good business and loaded it with so much debt that it failed.
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Old 03-20-18, 02:39 PM
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Re: R.I.P. Toys R Us

Originally Posted by Nick Danger View Post
https://www.bloomberg.com/news/artic...bt-laden-deals

So private investors took a perfectly good business and loaded it with so much debt that it failed.
Worse. They bought the business with debt, then loaded the business with that debt, in hopes of a quick profit turning sale.
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Old 03-20-18, 04:02 PM
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Re: R.I.P. Toys R Us

I worked as a cashier at Toys R Us from June 2015 to Oct. 2016 and it was really the worst job I've ever had in my almost 30 years in retail and customer service. Their motto is Every Customer, Every Time which means every customer gets asked to sign up for a credit card every transaction. So if a customer is buying a $2 ice cream cone we had to ask them if they wanted to save 15% by signing up for a Toys R Us credit card. No matter what they were buying we had to ask if they wanted to sign up for a credit card. It was the same thing if they offered a warranty on an item. A $4 warranty for a $10 stuffed animal or a warranty on a 100 piece lego set is a hard sell but if we didn't ask the customer we would get in trouble.

Every morning before the store opened their would be a meeting and everyone would be asked how many credit cards they signed up the day before and why didn't get more. I liked the customer and my co-workers but management was the absolute worst. My very first day I stood their and watched one of the managers yell at a customer because he asked about Shopkins and said he had bought some on Ebay. I ended up apologizing to the customer after the manager walked away but if I was that customer I would have been on the phone with the corporate office making a complaint. I watched the same manager tell another employee to shut up when the employee tried to ask a question. Just a very toxic environment.
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Old 03-20-18, 04:27 PM
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Re: R.I.P. Toys R Us

Buying a warranty on a non-electronic toy is ludicrous & a waste of money. Hell, even buying a warranty on an electronic toy may be a waste of money, depending on how expensive the toy was. Warranties add to the cost of items, and IMHO should only really be purchased for expensive electronics - like computers/TV's/etc.
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Old 03-20-18, 08:03 PM
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Re: R.I.P. Toys R Us

Extended warranties are mostly a waste of money no matter how expensive the product. Most electronics will fail within 90 days, typically inside the warranty period. If you purchase with a credit card it's likely the CC company will double the manufacturer warranty up to 12 months as a perk for using the card. Other than that, simply put back the cost of the extended warranty and use that for repairs should they be required. In the majority of cases you'll come out ahead.

The only warranty that's worth getting is one for accidental damage on laptops, tablets, and phones - basically portable electronics - as they're more prone to get damaged due to their portable nature.
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Old 03-20-18, 08:03 PM
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Re: R.I.P. Toys R Us

And, another "giant" falls to the Amazon monster.

Less competetiion = higher prices, worse service, lowering of the bar = BAD.
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Old 03-20-18, 08:47 PM
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Re: R.I.P. Toys R Us

Originally Posted by zyzzle View Post
And, another "giant" falls to the Amazon monster.

Less competetiion = higher prices, worse service, lowering of the bar = BAD.
Not Amazon this time.

If I'm reading everything correctly, it was a leveraged buyout by private "investors" who put the borrowed purchase funds (i.e. debt) on the company creating more interest payments than was sustainable. Basically, force a buyout, dump the borrowed purchase cost on the company, write down your investment (which gives you profit and you don't suffer from bankruptcy), which forces the company into bankruptcy as they can't pay the interest and continue to operate. Move on to another company to repeat the process.

It's a process which guts and ruins otherwise profitable businesses. It should never be allowed to happen but it does all the time. The (unethical) rich get richer and everyone else gets the shaft. And they do it with other people's money - never their own.

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Old 03-21-18, 10:30 AM
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Re: R.I.P. Toys R Us

Isn't Bain Capital Mitt Romney's company? Isn't he and his company widely known for doing this type of shit with profitable companies?
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Old 03-21-18, 12:34 PM
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Re: R.I.P. Toys R Us

Originally Posted by Red Hood View Post
Isn't Bain Capital Mitt Romney's company? Isn't he and his company widely known for doing this type of shit with profitable companies?
Founded by Romney, though I think he's long separated from it, but yes, this is basically their MO.
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Old 03-21-18, 03:12 PM
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Re: R.I.P. Toys R Us

interesting KB Toys is poised to come back with pop up stores for Xmas due to decline of TRU

http://money.cnn.com/2018/03/20/news...-us/index.html
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Old 03-21-18, 03:33 PM
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Re: R.I.P. Toys R Us

Originally Posted by zyzzle View Post
And, another "giant" falls to the Amazon monster.

Less competetiion = higher prices, worse service, lowering of the bar = BAD.
Kinda their own fault since their initial online strategy was to sell through Amazon rather than their own set. Rendered their online shop useless and no one who wanted to buy toys online ever thought to check out their site before going to Amazon.
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