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Toys R Us and its viability for the future

2

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  • sonsofscevasonsofsceva 1904 World's FairMember Posts: 542
    edited July 2013
    Once in a while, something shows up that works there, but you really have to mine for it. They had a 30% off of clearance coupon this week, so we bought a couple of clearance Cars 2 LEGO sets that were actually quite a bit below retail. Then, we combined one of those sets with two Kai's Mechs for my two boys, which are not quite as shamelessly marked up, and then were able to use the $10 off $50 coupon also.
    All of this led to about 40-45% off of the total retail cost.
    But that kind of stuff only happens a couple of times a year. Otherwise, we just go for the free builds and, as mentioned above, to 'window shop' the new sets.
  • meyerc13meyerc13 Member Posts: 227

    TRU can charge a premium in some instances. They get some sets ahead of other markets (even the local Lego store) and some will pay a bit more to have a new set before others stores have it.

    True, some will pay a premium to have it early, and TRU can make an extra buck (or ten) off of them. However, how much extra would TRU make if they sold those same sets at MSRP for a few weeks before other stores have them, moving more volume and grabbing those purchases before Wal Mart, Target, and even LEGO have the items on the shelves?

    I see plenty of people on here ordering new sets from LEGO imediately after release at MSRP, even though they could be bought cheaper from Amazon if you wait long enough. TRU is losing a lot of sales at MSRP, to get a few sales above MSRP. While they make more per item, overall they aren't making as much money as they could if they'd just stop playing these games with their prices, turning off a growing segment of their customer base.

    LFT is right, ditch the BOGO sales except maybe during Bricktober and immediately before the holidays, instead offer small discounts occasionally intermixed with exlusive offers (i.e. free polybag with $50-75 purchase). That's the formula the LEGO stores are using, and it seems to be working quite well for them.

  • GIR3691GIR3691 Member Posts: 674
    I hope they go away or severely rethink their business strategy. I'm so sick of them inflating prices and having deceptive "sales."
    margotDAVEmoonAndor
  • doriansdaddoriansdad CTCMember Posts: 1,337
    TRU has a $4 billion debt coming due 2018. If TRU follows the typical Bain Capital script they will default on this debt, declare bankruptcy, Bain will swoop in and raid its assets and pension funds, and take it all offshore to avoid paying taxes. I don't expect TRU to be around in 2019. Sad to see the jobs go but not their shady practices.
  • piratemania7piratemania7 New EnglandMember Posts: 2,146
    Toys R Us...I, as countless others have already, commented and posted about this place. They ran small mom and pop toy stores out of business, well, so did Walmart and Target, but I digress...

    The bigger picture here is that just like big book stores, the need for a large store handling a single commodity like this is becoming more and more irrelevant. Eventually, the likes of amazon and walmart and target will run amok with our economies of scale and wipe out the competition.

    Back on point, I dont think TLG needs TRU. Albeit, they are a nice add on but long term TLG will likely move away from this, especially their practice of releasing everything a month or more sometimes before the actual release date! Yup.
  • mrseatlemrseatle Member Posts: 410
    A couple of the TRU only stores closed here in Houston, but as long as people keep having babies, the TRU/BRU combo isn't going anywhere.

    I was a kid in the eighties and remember fondly, buying my Dungeons and Dragons original red box basic set there... Even though I don't shop there as much as I would like, they still have a place in the market.

    One positive note about TRU is the quick check out. Sure sometimes it's ten minutes. But everytime i go to Wal-Mart the line takes a half hour to check out at the register. ... Que for you Brittische folks. I hate that long line at Wal-Mart.
  • BoiseStateBoiseState Member Posts: 804
    I don't care about the markups.. It will be a sad day for kids when there's no mega toy stores around.
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,404
    ^ Why?

    Were there mega toy stores 100 years ago?

    I find it interesting how some things go away, and people say, "aww, we miss that, we need that", yet *that* is a very new and temporary thing that wasn't around for their parents (or grandparents).

    If people don't shop there, they won't continue to exist. If you want TRU to continue to exist, pay the higher prices and shop there.
  • y2joshy2josh Member Posts: 1,996
    edited July 2013

    Were there mega toy stores 100 years ago?

    Yes. FAO Schwarz was founded around 1862 or so.

    That said, the problem here isn't strictly TRU's insane markups or their generally filthy stores. The problem is the idea of the specialty store in general. You used to go to Toys R Us because that was your only option to get a lot of more obscure toys, not to mention they had a greater selection in the lines that were carried by Target or Wal-Mart. Now, I can just get on the Internet and find what I need with next to no hassle.

    Even if TRU did improve their online presence and fix their idiotic pricing scheme, I think it would be 'too little, too late' in terms of combating the likes of Amazon.
    DAVEmoon
  • mathewmathew Member Posts: 2,099
    edited July 2013

    ^ Why?

    Were there mega toy stores 100 years ago?

    Come on. Weren't you a kid once? Don't you have fond memories of going to TRU, Children's Palace, Toy Chest etc. and getting to pick out a new toy for being a good boy at the doctor's office.

    I think we all are pretty jaded by online shopping, clearance sales, BOGOs, scratch offs etc. and forget about the experience of buying a new toy. For a kid there isn't much gratification in ordering online or buying a toy that he may not even want just because it's 50% off.

    My mom (grandma) enjoys spoiling my two boys by taking them to TRU. She knows that they are overpriced, but it's a fun experience for her to go there with her grandsons.
    Thanos75sidersdd
  • mathewmathew Member Posts: 2,099
    And no, the toy aisle at Walmart does not replace the thrill of a giant toy store.
  • mathewmathew Member Posts: 2,099
    edited July 2013

    I find it interesting how some things go away, and people say, "aww, we miss that, we need that", yet *that* is a very new and temporary thing that wasn't around for their parents (or grandparents).

    What do you mean? Big department stores have been around since our grandparents. They have been around for a hundred years at least. If anything it's rather sad that that big department stores have been replaced by Super Walmarts and online shopping.
  • margotmargot Member Posts: 2,308
    Smaller mom and pop toy stores with better quality toys are actually a lot more fun than the cheap plastic craporama that TRU is.
    Andor
  • mathewmathew Member Posts: 2,099
    margot said:

    Smaller mom and pop toy stores with better quality toys are actually a lot more fun than the cheap plastic craporama that TRU is.

    It's been discussed, but due to Lego's strict policies regarding resellers very few mom and pops carry the brand. Mom and Pops are more likely to carry Melissa and Doug and generic branded building blocks. Most of the collectors here would stick their noses up at these brands.
  • margotmargot Member Posts: 2,308
    ^The mom and pop store we shop at carries Lego.
  • BoiseStateBoiseState Member Posts: 804
    TRU is heaven for kids. Wal Mart and Amazon, not so much.



    With kids, the experience of shopping for a toy is almost as great as the toy itself. To me, it's worth a few extra bucks. I won't shop at Amazon after watching a documentary on how they treat their employees, purposely hiring mass amounts of temps in order to not give them any health benefits. There's a reason they can afford to beat everyone price wise.
  • CupIsHalfEmptyCupIsHalfEmpty CanadaMember Posts: 545
    Don't worry going to the moon is still on topic because toys r us's prices are so high they are "to the moon" thus proving every grandparent has been to the moon in order to get little 'Timmy' his Christmas present.

    Case closed.
    LegoFanTexasnkx1Andor
  • BumblepantsBumblepants DFW/BGMember Posts: 7,357
    I think we are arguing sentiment vs finances here. Yes, it is fun for kids to go in big toy stores. It was also fun to go to Border's Books. But 'fun to go to' doesn't always equal financially sound business model. TRU is hemorrhaging money and as such will not survive unless they change things and quickly.
  • TheLoneTensorTheLoneTensor MericaMember Posts: 3,937
    mathew said:

    And no, the toy aisle at Walmart does not replace the thrill of a giant toy store.

    I will disagree with this, mostly because the areas within a TRU that interested me as a kid are encompassed by the toy aisles at Walmart, Kmart, Meijer, etc. I always enjoyed visiting those stores as a kid and running to the toy area as much as I enjoyed visiting a TRU. The only thing TRU really had was more selection of each (still true today for the most part).

    TRU could die, maybe should die, and the world will spin on.
  • YellowcastleYellowcastle Northern VirginiaAdministrator, Moderator Posts: 5,234
    If it dies, it dies.

    image
    LegoFanTexasDevastatordougtsGoldchains
  • mrseatlemrseatle Member Posts: 410
    They also offer a couple services which will help them sustain in the future... Ship to Home (from the nearest stores' back room), and "in store pick-up" (of items ordered from online).

    The stores themselves have to become more efficient and better managed too.

    15 years ago people said that "Malls" were a thing of the past and soon to be extinct... A few of them closed, but many are still open for business.

  • TheLoneTensorTheLoneTensor MericaMember Posts: 3,937
    Malls are a thing of the past and will soon be extinct.
  • mathewmathew Member Posts: 2,099
    If malls are to be extinct then why does Lego keep opening new stores in them? Or Apple?

    Malls are evolving. People still need to try on clothes and want instant gratification with purchases. The problem with malls is that they are heavily dependent on location. So if the area around a mall goes down hill then so does the mall. They are building two brand new outlet malls in an affluent suburb of St. Louis. Meanwhile we have a perfectly viable mall here in a less affluent part of St. Louis. But it is going down hill because nobody wants to shop there anymore because of the area around it.
  • YellowcastleYellowcastle Northern VirginiaAdministrator, Moderator Posts: 5,234
    All - this is a good topic as TRU is really the last remaining big box toy store. Please stay on topic or A)We may have to close this thread or B)You force me to cut out all the bad tissue and I would prefer to save surgery for mid week. Lastly, steering these threads to religion, politics, guns and any other 3rd rail items is unacceptable. Some of you are the worst offenders and really need to check yourselves before you wreck yourselves. The staff is all volunteer and doesn't have the time nor the inclination to review each and every one of your posts each morning. We absolutely don't want to take any administrative action because each of you are an important part of the Brickset community. If someone tries to steer a thread into the gutter, please don't respond as you're simply exacerbating the problem. Please simply flag it for surgery. And if we have to operate too often because our patients aren't holding up their end, ,"we'll have to do what we have to do."

    Note: Movie quotes and/or stills are allowed if not required until such time as they sack me. :o)
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,404
    edited July 2013
    edited because @Yellowcastle is no fun and likes to kick puppies!!! :)
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,404

    Lastly, steering these threads to religion, politics, guns and any other 3rd rail items is unacceptable.

    Then all I'll say is... that is sad... the saying, "don't discuss politics and religion " in polite company is exactly the problem.

    If no one can talk about it like intelligent human beings, then all we'll get are the screamers and extremists, and that leads to hate, violence, and suffering in the world.
  • YellowcastleYellowcastle Northern VirginiaAdministrator, Moderator Posts: 5,234
    ^ Please send me an invite to your new forum BricksWithDarth and I will join immediately. While you're in our home, however, we expect you to take off your shoes.
    y2joshCupIsHalfEmptysidersddLegoFanTexas
  • LegoFanTexasLegoFanTexas TexasMember Posts: 8,404
    edited July 2013
    ^ I did edit my post above, so I will comply with the rules.

    Surgery performed by staff 7-13-13
  • dimefielddimefield Edmonton Alberta CanadaMember Posts: 314
    We just got a Lego store here in Edmonton and TRU's prices match across the board. They also have one or 2 product lines on at 20% off every week. That being said if the U.S. TRU's go down so will the Canada's. Would be a shame.
  • hippoeaterhippoeater Member Posts: 30
    I remember a few years back when I got back in to collecting LEGO's and I stopped in to my local toys r us to pick up a few sets and look around. I was shocked when I saw prices higher than what I had seen on the official lego store website just the night before.

    I asked the clerk at the customer service desk if they would price match the lego store price and she said they couldn't. I asked why and she said they didn't price match online vendors. I mentioned the lego store and even showed her target and walmart's prices and asked if they would match those and she still said no.

    When I inquired why they wouldn't price match those prices or even what the mfg said is the suggested sales price - she told me that toys r us doesn't have a price match policy.

    I was shocked. I couldn't believe it. I called the 1800 number for their customer service to confirm this and they did restate that they do not price match competitors. I asked why they would sell something for more than the mfg sells it for and every other competitor in the marketplace and he couldn't give me a straight answer.

    I continued the conversation and asked him if losing me as a customer that had shopped their since I got my first NES as a kid was worth losing over 10.00 and he said unfortunately there was nothing he could do and that was their policy.

    I haven't been back in to a toys r us since.

    I have no problem paying more for something if I feel that the service I am getting (experience, customer satisfaction, environment) adds to the value of paying more. I would not say that is the case in shopping at toys r us, IMO. Like some have mentioned above - it may be the only option for some locally and that is their "value" , but for me that isn't the case. I have a local walmart, target, lego store and no problems with shopping on amazon.com or lego.com.

    This is only a component of their business but it influences my shopping habits of other items they also carry that I purchase.

    bluemodern
  • dimefielddimefield Edmonton Alberta CanadaMember Posts: 314
    Yet here in Canada TRU does price match.. Odd
  • legogallegogal USMember Posts: 754
    I agree with others that TRU used to be the main source of LEGO sets for many of us in the USA during the 80's when LEGO were just going mainstream in the US. The stores were clean and well stocked, and sales were frequent. Even then I did not take my son in the store except to let him play video games (which we did not allow at home) while I sat in one of their little chairs and read the American Girl doll books.

    Then about 5 years ago I returned to TRU to buy LEGO for me and found that their prices were above MSRP and that they did not match prices at our local LEGO store. This astounded me because I saw no reason to pay a premium for the same sets. And about twice a year I check on the LEGO in our TRU just to see what is new, and watch the store get dirtier, the prices higher, the sales deals worse, and the help become less helpful. And the store is almost full of plastic junk that passes for toys.

    So now I buy mostly from our LEGO store, Bricklink, or eBay. I agree with others in not seeing a viable future for TRU. And I am one of those rare parents who does not believe in taking children in toy stores more than once or twice a year, so the loss of seeing a child go crazy over a certain toy is not lost on me.
  • NellyNelly Member Posts: 77
    TRU is slowly losing its market in Southern California. I live in Orange County, CA and we have only 6 TRU stores for a population of over 3 million. In the 5+ years since my dark ages, I have seen 3 close, including 2 in some of the most affluent cities nationwide. There now are nearly more LEGO Stores (5) nearby than TRU stores.

    The several TRU stores I frequent have very few customers and only 2-3 employees on hand (1 manager, 1 customer service/cashier, and 1 on the floor). I can't imagine how much longer these few will remain open.
  • mrseatlemrseatle Member Posts: 410
    TRU near me price matches places like Walmart and Target, but not Amazon...
  • LadyDJTVLadyDJTV Member Posts: 8
    Sorry for bumping an older thread, but has anyone noticed TRU's selection online diminishing lately?  Back at the beginning of this year, they still had quite a variety of standard sets and a pretty robust selection of HTF's.  Now I look in the HTF's and almost everything is sold out and several things have disappeared completely.  I called in February and asked about Parisian Restaurant and a couple other items and was told that they had an order waiting to be filled for more inventory.  A month later and it's not even on the site anymore.  Selection at my local brick and mortars is still ok, some better than other but it seems like the online store has gone down.

    Also, any thoughts on all the Bricktober sets still stacked and sitting around that they can't seem to get rid of?
  • Pitfall69Pitfall69 0 miles to Legoboy's houseMember Posts: 11,453
    They are closing their Flagship Times Square store in NYC. What does that tell you?
    VorpalRyuSethro3
  • LadyDJTVLadyDJTV Member Posts: 8
    Nothing good but nothing concrete either.  Sears did exactly the same thing in Chicago last year or year before last and are still operating.  Still not something promising to hear.

  • wayneggwaynegg Texas,USAMember Posts: 394
    edited March 2015
    ... I found out that TRU has a 4 billion dollar debt that is due in 2018
    TrU could easily cover that debt on time, but would have to have a change in direction from the top down. In 2013 they profited just over the $4 B mark, promptly fired the 3 top execs who put the plans in motion to make that possible, gave the executive board ludacrous bonuses (imagine dividing $1.3 B between 14 people ludacrous), heavily invested in the cheap quality Chinese toys nobody buys (another $1.8 B ), opened more pop up stores in previously failed locations to task with selling those toys, and paid out their obligatory dividends to investors. 

    So...can TrU survive? Yes.

    Will they? Probably not under the current leadership.
    VorpalRyumadforLEGObluemodern
  • BillybrownBillybrown UKMember Posts: 748
    For me its only a matter of time before they go under. I genuinely don't know what their target audience/customer is and I don't think they do either, thats a dangerous game to play.
  • XefanXefan Member Posts: 1,148
    waynegg said:
    ... I found out that TRU has a 4 billion dollar debt that is due in 2018
    TrU could easily cover that debt on time, but would have to have a change in direction from the top down. In 2013 they profited just over the $4 B mark
    I think you're confusing revenue and profit. According to TRU's own financial statements (which have a legal obligation to be accurate) they made a net loss of $1bn in 2013 on revenue of $5.3bn. Removing debts from the equation and going straight with their EBITDA they made a profit of just under $0.59bn (then had to blow it all on debts and then some, hence the loss of $1bn):

    http://www.toysrusinc.com/press-room/releases/financial/2014/toysrus-inc.-reports-results-for-fourth-quarter-and-full-year-of-fisca/

    Last year they upped their EBITDA to just short of $0.65bn, and dropped their net loss to about $0.3bn:

    http://www.toysrusinc.com/press-room/releases/financial/2015/toysrus-inc.-reports-results-for-full-year-and-fourth-quarter-of/

    So they're losing money year on year, they're reducing the amount they're losing, and they may even reach a point where they make an annual net profit in a particular year, but none of this paints a great picture for a firm that has billions in debt payments due, not just in 2018 but in 2015, and 2016 as well.

    Frankly TRU is screwed financially, it's going to default unless it manages probably the most drastic and incredible turnaround in corporate history which is incredibly unlikely. The only question is what happens when it does default, it's possible some lenders will allow refinancing and repayment over a longer term if TRU has picked up the pace of it's recovery, but if it's pace of recovery is too slow it'll likely be put into administration from where it'll either be asset stripped and various parts sold on, or where it'll be bought as a whole by someone who thinks they can turn it around properly or simply integrated into an existing brand, with stores closed where there is already another of the purchasing brand's stores nearby.

    TRU as you know it simply wont exist by 2020, it'll either be nothing more than a memory or it will look very different to TRU as a company right now.

    pharmjodnatro220
  • madforLEGOmadforLEGO Chicagoland USMember Posts: 10,565
    edited March 2015
    For me its only a matter of time before they go under. I genuinely don't know what their target audience/customer is and I don't think they do either, thats a dangerous game to play.
    Actually I think what is worse is they really do have an idea, they are just trying to tank the company. I'm sure there are financial reasons for a company to do this. Maybe to liquidate whatever they can and sell off or write off the rest? I'm sure one of the more astute business people here can better explain.
    But it explains why they have boosted their items to well over retail and have made their stores harder to navigate. Their management is so inept their only reason has to be it is on purpose.

    It is sad when that is apparently your business plan though, as this affects many many lives, and not just the customers either. We are talking about people that rely on those jobs who could be out of work while the executives get their golden parachutes.

    BrickDancer
  • Sethro3Sethro3 United StatesMember Posts: 947
    ^Isn't that how the world works? Management wins out while the worker bees die off?

    All I know is National Vision, Inc (The company I work for) was purchased by the same financial group that owns TRU...they are rapidly expanding stores for us while forgetting about the older stores that make it possible to expand...

    It sounds like they just want to make as much money as possible in a small amount of time, and then cash out. Which is good business for the owner/investors, but not good business for a long term company.
    madforLEGObluemodern
  • natro220natro220 USAMember Posts: 545
    Funny, I just read this article about TRU, they're adding play areas to some stores as an "added value".  Wonder if they'll have a Lego area?

    http://www.msn.com/en-us/money/companies/toys-r-us-seeking-to-ward-off-discounters-by-adding-play-space/ar-AA9WxNt#page=1
  • ACWWGal2011ACWWGal2011 Member Posts: 534

    "15 years ago people said that "Malls" were a thing of the past and soon to be extinct... A few of them closed, but many are still open for business."

    Yea but how many of the open ones are dead malls and how many are actually active ones? We have 2 malls near us. One is a DM unless things changed big time in a few months. we were there since my uncle needed to hit a store there for paperwork for his job(he works elsewhere). Only a very small amount of people were walking around, at least 2/3rds of the stores were unpopulated by businesses and not many places that had established places were open.

    The other is a bit of a stretch to call it a mall since, if anything, it more closely resembles a big clothing store since about 75% of the stores and kiosks in that mall are either clothing or stuff you associate with clothing such as shoes, make-up, jewelry, purses, etc. And the number is even higher if you don't count the food court.



  • madforLEGOmadforLEGO Chicagoland USMember Posts: 10,565
    natro220 said:
    Funny, I just read this article about TRU, they're adding play areas to some stores as an "added value".  Wonder if they'll have a Lego area?

    http://www.msn.com/en-us/money/companies/toys-r-us-seeking-to-ward-off-discounters-by-adding-play-space/ar-AA9WxNt#page=1
    I doubt LEGO would be a toy in a play area. Too easy for parts to get lost, broken, or 'walk away'.
    I think TRUs already have a big enough issue with LEGO 'walking away' I doubt they need have LEGO in the toy area to further that along. :smile:

    "15 years ago people said that "Malls" were a thing of the past and soon to be extinct... A few of them closed, but many are still open for business."

    Yea but how many of the open ones are dead malls and how many are actually active ones? We have 2 malls near us. One is a DM unless things changed big time in a few months. we were there since my uncle needed to hit a store there for paperwork for his job(he works elsewhere). Only a very small amount of people were walking around, at least 2/3rds of the stores were unpopulated by businesses and not many places that had established places were open.

    The other is a bit of a stretch to call it a mall since, if anything, it more closely resembles a big clothing store since about 75% of the stores and kiosks in that mall are either clothing or stuff you associate with clothing such as shoes, make-up, jewelry, purses, etc. And the number is even higher if you don't count the food court.




    While I think there are some very successful malls still out there, I think you have a lot of malls that are dead but just do not know it. (like you said about 1/3 full but not very busy, and barely holding on).
    I have a few malls around me, but the only one I go to is 30 minutes out of my way because of the LEGO store, and I go to very very few of the other stores.
    It is a bit sad, as it used to be the place to find almost anything. Unfortunately due to the internet, which is really a large mall and with cheaper prices, the physical malls are dying out.

  • ACWWGal2011ACWWGal2011 Member Posts: 534
     " While I think there are some very successful malls still out there, I think you have a lot of malls that are dead but just do not know it. (like you said about 1/3 full but not very busy, and barely holding on).
    I have a few malls around me, but the only one I go to is 30 minutes out of my way because of the LEGO store, and I go to very very few of the other stores.
    It is a bit sad, as it used to be the place to find almost anything. Unfortunately due to the internet, which is really a large mall and with cheaper prices, the physical malls are dying out."

    Well, for me, malls aren't too useful for me but its not due to the internet. When I do get clothes and shoes, its from Walmart. When I do seek video games and I want to use a GS instead of online, I tend to use GS's way closer to us. There's ZERO lego stores in LA so its not like I can go hit a lego store in the malls around here so I have to rely on Walmart and target for a lot of my buying. If there's a book I want to find, I tend to either hit the library or keep an eye out at second hand places.


     
  • JoeHead14JoeHead14 Member Posts: 5
    We shopped at one in Savannah this week and they still price match Walmart, Target, and Amazon, but won't price match Lego.com.  I think that is because they don't want to match their TRU exclusives since Lego.com is the only other venue selling them.  I would prefer to buy somewhere else but now that they price match (since last fall) I don't mind as much.
  • PoochyPoochy USAMember Posts: 479
    edited March 2015
    ^ Next time point them to their own PM policy which states:

    We will match prices from selected online competitor websites, including Walmart.com, Target.com, BestBuy.com, Sears.com, Kmart.com, buybuyBaby.com, Meijer.com, FredMeyer.com, diapers.com, BabyDepot.com, LEGO.com and Amazon.com (not including marketplace pricing).
    TheLoneTensorGoldchains
  • RonyarRonyar Member Posts: 373
    ^i find it interesting that their price match policy does not state anything about the item having to be in stock at the competitor's website. I could have sworn I've been told that in the past as well.
  • natro220natro220 USAMember Posts: 545
    ^ If you click the link and read the entire policy, in the section "We will not match prices for competitors':" it states they don't match out of stock items.
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