Toys ’R’ Us is rising from the dead

prevere

Just saw this on LinkedIn. Love that they are calling it TRU. I think we all knew this was coming, it was just a matter of the finances getting restructured. The return of overpriced LEGO. Whew hew! 

https://www.businessinsider.com/toys-r-us-is-back-2019-2

SteveG

I really just hope that they get their tech sorted out this time. That has always been their weak spot when competing with the likes of Walmart and Amazon. They could probably also do with slightly smaller stores this time around. 

Astrobricks

That story is rather short on details, but it sounds like they’re starting almost from scratch, other than the branding and some executives. 

SumoLego

Did I just read a press release or just a shoddy piece of clickbait posing as journalism?

The only thing I took away from that story is that someone bought the TRU IP.  I'm filing that in the 'nobody gives a crap' drawer.

Bumblepants

SumoLego said:

 I'm filing that in the 'nobody gives a crap' drawer.

I know I don't give a crap about them coming back or not. 

Switchfoot55

I always give crap. But NEVER take it. 

SumoLego

Unless you're at the bottom of the hill.

Switchfoot55

Dangit...I do live at a bottom of a hill.

prevere

It's a brief from Business Insider so take it for what it's worth. Not much. I'm sure we'll get more details soon. Some of their real estate has already been gobbled up by others (like Ollie's outlets), so smaller stores may be necessary. 

Unless they totally changed the store approach and included something crazy like a bit bar w/ classic arcades, putt-putt (holes themed from major toy lines), sundae shop, educational classes, etc. More or less a reason for people to gather and experience toys together.  

If they do the same thing, the best case scenario is short-term mild success, until Amazon eventually suffocates them again.  

Pitfall69

Switchfoot55 said:

Dangit...I do live at a bottom of a hill.

I live under a bridge and demand memes from people in order to cross.

SprinkleOtter

Hey! Let's even bring back old execs! What could possibly go wrong??

SumoLego

SprinkleOtter said:

Hey! Let's even bring back old execs! What could possibly go wrong??

We'll have them invest in sub-prime mortgages, Beanie Babies, some mid-90's baseball cards and some California energy futures!

madforLEGO

Hey, I never thought Id miss TRU, until I saw how bricktober figures were handled without them.

For all the hate on TRU, at least I would have probably been able to get a Bricktober Marvel set from them without having to pay someone outside of the US 50+ dollars to get one.

Astrobricks

Take my memory for what it’s worth, but I recall two things - TRU was making money, but not enough to service their massive debt, and the resurrection is based on having NOT sold the brand to anyone. That auction was stopped. 
Neither of which means this will automatically be successful, of course. I agree that they need a different concept. Just being a big box store has been shown not to work anymore. I look forward to what they come up with.

SteveG

Along with their debt load, they made some massive mistakes online. They started out by letting Amazon be their exclusive online retailer. Then after Amazon got all their data, refused to renew the contract. This left TRY with no way to sell online and forced them to rush to build an e-commerce solution that was flawed from the get-go and cost 2 or 3 times what it should have cost. 

This put them in the horrible position of playing catchup to the Amazon juggernaut. 

We won't even go into how bad many of their stores were. Dirty, dark, warehouses with burned out employees and toy scalpers raising the isles while product was being stocked. I watched grown men shove kids aside to get at a freaking hot wheels car. 

I loved TRU, like KayBee even more, at least that was clean. But unless the new management (which looks a lot like the old management) smartens up, they won't be around long this time either. 

Astrobricks

Yeah, I hope they don’t think they can rely on TRU nostalgia to help.

Aleydita

The TRU model worked - the problem was the debt forced upon it that had not arisen within the company. The company was profitable but for the debt repayments. 

Astrobricks

Aleydita said:

The TRU model worked - the problem was the debt forced upon it that had not arisen within the company. The company was profitable but for the debt repayments. 

That sounds familiar. 🤔

SumoLego

They wouldn't have been able to have the footprint and revenue (albeit inadequate) they had without incurring atleast part of the massive debt.

It was TRU's debt.  It's not like there was a game of corporate musical chairs and TRU got saddled with some unanticipated random debtload.

I am sure there is room in the retail space for a national chain toy store, but unless consumers are willing to pay a premium for a brick-and-mortar experience, we' be stuck with what we got.

I remember Dell and Gateway computer stores years ago.  Going out of business... yet Apple Stores are wildly successful.  (And LEGO Stores as well...)

Aleydita

SumoLego said:

It's not like there was a game of corporate musical chairs and TRU got saddled with some unanticipated random debtload.

Er, that's exactly what happened. It always had historical levels of debt that the company serviced, but when it was sold for $6bn, over $5bn of the credit secured to purchase the company was front-loaded as company debt. It essentially bought itself, at an annual cost of $400m in debt repayment. Take away the $400m and TRU was profitable in every single year.

It's quite a common thing in large corporate buy-outs. It's usually just a paperwork exercise allowing the new owners to reduce tax payments across their business empires.

eggshen

Bain, KKR and Vornado killed TRU. They ballooned the debt, made terrible decisions, and in the end milked TRU for all they could. According to what I've seen they were able to squeeze about 200 million out of TRU. The last CEO, a former Bain employee, made 11.5 million in the last 2 years TRU was open. 
Vulture capitalism at its finest.

shikadi

@eggshen Yep, lost my job over this whole ordeal. I don't think I'll be moving back to NJ. Considering managing a somewhat independent brick and mortar store. Maybe a Lego if TLG will have me, but I don't like the mall atmosphere.

rbozarth

shikadi said:

@eggshen Yep, lost my job over this whole ordeal. I don't think I'll be moving back to NJ. Considering managing a somewhat independent brick and mortar store. Maybe a Lego if TLG will have me, but I don't like the mall atmosphere.

Brilliant idea! Let's get the Lego Stores out of malls.  However, I don't see this happening due to the model working for them this long.  I would much prefer to visit one in an outdoor marketplace or even a stand alone building.

dannyrww

We'll hear more after NY Toy Fair I think, as they will be meeting with manufactures. The sad reality of it all is toy companies took a big hit this year without Toys R Us (Not sure about Lego but Mattel has said so). Those companies may support a comeback (even though they were burnt by the bankruptcy). The thing is everyone seems to talk about how overpriced and horrible it was, but I have fond memories of the store. They did a lot of free events, and while some items were priced poorly, I was able to get Lego sets at the same price as Lego Store or price match them. Maybe I like to look at the positive, but I do miss walking around a toy store, so I hope they come back.

SumoLego

Aleydita said:
It's quite a common thing in large corporate buy-outs. It's usually just a paperwork exercise allowing the new owners to reduce tax payments across their business empires.

My point is that execs, boards and investors opted to sell/purchase that created all of the crushing debt that ultimately bankrupted TRU.  Had TRU been able to increase profit outpace the debt payments, then maybe it would have survived.  Or not, who knows?

(Also one of the risks of being a publicly traded entity.)

Shib

The simple solution is that the US need Smyths Toys ;-) 

It is strange from a UK perspective to hear the doom and gloom over the demise of TRU. Don't get me wrong, I have fond memories of trips to TRU when I was a kid, but they were an absolute dinosaur and in the UK between The Entertainer running high street toy shops and Smyths usurping the TRU model but moving it with the times I feel no real loss over the demise of TRU. 

PJ76uk

Shib said:

The simple solution is that the US need Smyths Toys ;-) 

It is strange from a UK perspective to hear the doom and gloom over the demise of TRU. Don't get me wrong, I have fond memories of trips to TRU when I was a kid, but they were an absolute dinosaur and in the UK between The Entertainer running high street toy shops and Smyths usurping the TRU model but moving it with the times I feel no real loss over the demise of TRU. 

Whilst I agree in principle with this, I do feel a loss over the demise of TRU, a little something called "Bricktober" sets. If only Smyths did those too then all would be good!

Shib

To be fair, they might end up as the UK distributor for them, last year was too late to sort much else. 

PJ76uk

To be fair, an alternative was found for the HP set at least in the States so not sure if time constraints was an issue...

Th1nDiesel

Shib said:

The simple solution is that the US need Smyths Toys ;-) 

It is strange from a UK perspective to hear the doom and gloom over the demise of TRU. Don't get me wrong, I have fond memories of trips to TRU when I was a kid, but they were an absolute dinosaur and in the UK between The Entertainer running high street toy shops and Smyths usurping the TRU model but moving it with the times I feel no real loss over the demise of TRU. 

I have similar feelings about TRU. As a kid, in the 90s, the nearest one was over an hour away so I only ever went there once. TRU to me was merely something that appeared on TV at Christmas time. 

My nearest large toy store as a kid was a Jolly Giant!! And that was still a 20 minute drive so I didn't go there very often either.

Incidentally, it was later replaced by a TRU (almost, it was a few stores down) which I visited a few times as an adult; mainly to pick up exclusive stuff like the Batman Movie Bricktober set and once just before it closed.

PJ76uk

Probably the best thing out of TRU closure was the clearance sales when it went under! Bought a load of cheap sets in the last day or so at decent prices. Still have a sealed #70618 I managed to find in pristine (albeit dusty) condition, might even build it one day!

Th1nDiesel

The Lego sets didn't last long at my nearest store; most of it went once it hit 20% off. I managed to pick up #70632 Quake Mech which was already reduced by 20%, so I got it for just over £50. I didn't go during the last few days, but I doubt there would have been any Lego left.

shikadi

rbozarth said:

shikadi said:

@eggshen Yep, lost my job over this whole ordeal. I don't think I'll be moving back to NJ. Considering managing a somewhat independent brick and mortar store. Maybe a Lego if TLG will have me, but I don't like the mall atmosphere.

Brilliant idea! Let's get the Lego Stores out of malls.  However, I don't see this happening due to the model working for them this long.  I would much prefer to visit one in an outdoor marketplace or even a stand alone building.

It's a shame, I have been there, done that with working in malls. Opens you up to more security risks, unsupervised children, and just a more rushed and hostile experience.

My TRU would only get as busy as a Lego store during Christmas season. Off season and nights it could even be a little zen cleaning the aisles and re-arranging the toys. If they ever do open a standalone I might consider. Not sure where else to go for decent conditions in retail.  Mostly hoping TRU can return to a shred of its former glory.

Bosstone100

I work at a hospital and there was a TRU across the street. We bought it out, will demolish it and build up to a seven story cancer treatment center. 

Istokg

Google is your friend... if the Toys R Us resurrection isn't real, then a lot of folks such as Forbes, NY Times, CBS News, Washington Post... etc. have been hoodwinked.

For whatever reason they went belly up, I'll be glad to see them make a comeback.  I for one don't want to have no other shopping option than Amazon and Ebay.

Also Toys R Us is part of LEGO set history.  Many sets were only available as Toys R Us LEGO exclusives.  From 1991 to 2017 there were 54 LEGO sets that were Toys R Us exclusives. 

No wait... that including 11 of those crappy minifig exclusive sets... feh!  Nevermind... let them stay under.... ;-)

shikadi

I dont see anyone doubting its real. Its certainly the case that some TRU upper brass in jersey have purchased the assets including KRU, BRU, private label brands (fastlane, imaginarium, etc) and Geoffrey. Whether that means they will (re)open stores in North America is yet to be seen.

madforLEGO

Bosstone100 said:

I work at a hospital and there was a TRU across the street. We bought it out, will demolish it and build up to a seven story cancer treatment center. 

Will one of those floors be a toy store?

Astrobricks

madforLEGO said:

Bosstone100 said:

I work at a hospital and there was a TRU across the street. We bought it out, will demolish it and build up to a seven story cancer treatment center. 

Will one of those floors be a toy store?

Talk about predatory retail! 

CCC

Bosstone100 said:

I work at a hospital and there was a TRU across the street. We bought it out, will demolish it and build up to a seven story cancer treatment center. 

With a helipad?

SprinkleOtter

CCC said:

Bosstone100 said:

I work at a hospital and there was a TRU across the street. We bought it out, will demolish it and build up to a seven story cancer treatment center. 

With a helipad?

No, but there will be a lighthouse attached, with a sausage cart...

shikadi

Astrobricks said:

madforLEGO said:

Bosstone100 said:

I work at a hospital and there was a TRU across the street. We bought it out, will demolish it and build up to a seven story cancer treatment center. 

Will one of those floors be a toy store?

Talk about predatory retail! 

I know it was a joke, but Build a Bear has plenty of stores in childrens hospitals. If there's an opportunity to make money, someone will take it.

andywilson

Aren't hospitals money-making ventures in the USA anyway?

SumoLego

andywilson said:

Aren't hospitals money-making ventures in the USA anyway?

Some are, some aren't.  But even not-for-profits still gotta make coin wherever they can...

dmcc0

^Even if they rise from the dead they're not going to simply re-open stores that closed down.  I imagine any property they actually owned would've likely been sold to pay creditors when they collapsed.  Most stores were probably leased and many of those may have been filled by other companies by now anyway; both my local Toys R Us stores now have new stores occupying them.

daewoo

I doubt that this new iteration will begin with big box stores since that was one of the issues that plagued them.  My guess is that they'll start out small with a keen focus on internet sales since that is lower cost than leasing brick & mortar (and one of the large failures of the now defunct brand).

SumoLego

I don't think the local locations were really a systemic problem with TRU.  Although given the same problems with many large retailers in recent years, even if TRU was in good fiscal shape - they may have ended up suffering the same fate.

Over-leveraging was the primary cause of their demise.  I always thought TRU would have made a nice subsidiary of Amazon.  But the name isn't worth the collateral responsibilities.

shikadi

Rumor is "pop up" temporary stores in malls and limited commercial space in major US metros for Q3&4 2019

There is some precedent as this was tried in the last few years with mixed success

@daewoo is right that you're not going to see your old location revived