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Toys R Us bankruptcy filing?
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Comments
Nobody has the appetite to restructure the debt again if the competition is willing to take losses (Amazon), ruthlessly increase margins from suppliers (Wal-Mart) or are zealots for efficiency (Target).
(I'm not sure how you could operate the distribution system for the US with a limited number of stores - but there are far smarter people that can figure out those logistics.)
The liquidators take over as early as Thursday, with the official closing date of April 15th. The retail warehouses are supposedly empty, with all excess product being available at the remaining locations. Employees in most states are required to be paid for 60 days after the final day the store is open. In New York it is 90 days, then eligibility for unemployment.
Also, they already cut loose most of the folks at TRU HQ.
Any deals would start on Thursday - but with the 'run' on people using up gift cards and points, I wouldn't expect any desireable LEGO to remain. My local store still has the above RRP on everything.
(Maybe I'll finally buy those four Chima sets that have been on a 5% clearance price off of their 10% TRU inflated RRP...)
One store I visited late last week was cleaned out of #30526 except for a lone one crumpled up like it was trampled and their stock of #30450 was also dwindling. This same store had plenty of both just a few days prior. The second store I visited yesterday still had plenty of both but not as many as when I visited exactly a week ago.
I know there had been discussions in the polybag thread about these two, so I'd suggest getting to a TRU ASAP if you're still looking for those, particularly if you're looking for #30526 since I haven't seen that one anywhere else (I've seen #30450 at Walmart).
They can't even communicate the company closing plan properly to the local staff and I find that very disrespectful: "Sorry you are losing your job that you've had for the last 10 - 20 years, your last day will be April 15th, or maybe May 15th, but you will get paid through June 15th. Or maybe April 15th, we aren't too sure. At least you can take advantage of the sales that will start next week. Or possibly the week after. And we have a ton more merchandise coming, the warehouses are full. Or maybe they aren't. Can I have my CEO bonus now so I can go on vacation before I start my new job as CEO of another company I'm going to run into the ground by saddling them with ridiculous amounts of debt?"
Maybe there will be a buyer, maybe not, but they still have to move forward with the process. One can always buy more product.
The other day it was funny to see the Pokemon merchandiser packing up all of their product. (TRU gets a percentage of sales of the product - and doesn't actually own the product!)
https://www.axios.com/toys-r-us-fate-could-be-decided-tomorrow-1521471716-e477e089-c89a-4179-9aa9-739ad711b5e1.html
While true in the long term, I feel like in the short term there were some bridges burnt prior to and during the bankruptcy proceedings based on some of the news about supplier payments that has come out, and this might not actually be an option at the moment in some cases... Or, at least not under current ownership and management.
(They may just be more careful about how they supply their product.)
https://www.bloomberg.com/news/articles/2018-03-19/amazon-is-said-to-have-mulled-acquiring-some-toys-r-us-stores
I find it incredulous that they would consider the fractured parts of TRU to be their jumping-in point for retail locations. (I could see wanting to acquire the distribution network, but I'm pretty sure they have a more efficient one already in place.)
But that's why the article mentions that they're going to select the stores in the markets that are appealing.
Amazon bought Whole Foods for their food distribution, why not a TRU and change it for a package pick-up location and quasi-store?
Having lockers all over the place means multiple stops for the driver, wasted time, and more management.
Having a HUGE locker space (a repurposed TRU) may be more beneficial: the square footage can handle returns, store larger items, and the parking lots are already large enough to accommodate customers.
Although TRU moves a lot of product, they're not in the business of extending substantial amounts of product on credit. Otherwise, LEGO would have their Retail Merchandiser network (or an entity like National Merchandising) out at the stores packing up product.
I noticed merchandisers for the book company inventorying and packing up all of the books at TRU.
The place was PACKED! (Not really surprised considering whats going on)
I picked up the new Porsche RSR #75887 along with the Mercedes AMG-GT3 #75877.
I also picked up the Ninjago Movie Spinjitzu Training set and a poly bag of the Milano.
The aisle really looked picked over considering nothing was marked down except for the Brick Heads.
It makes one wonder that absent the crushing debt service, could a mediocre national toy retailer exist? Or is it just a non-starter?
I agree. My preferred TRU is clean, has a knowledgeable staff with tenure (a few have over 20 years with TRU), is well-organized, and is kept well stocked. My only complaint is with the company's pricing policies. If they were more competitive in that regards I would have made more of my purchases there.
It's certainly a symptom, but I don't know about the solution part. Arguably they would have been much better off focusing on something like increasing brand loyalty/repeat sales to drive up sales volumes, removing the need for any price increases over RRP in most cases. Especially for LEGO, whose MSRP is something that is easily discovered, AND can be obtained at that MSRP or cheaper very easily for 99% of sets, seeing prices even slightly over that decreases my trust in the store and turns it very quickly into a last resort purchase destination for ANY item.
I'm hoping a better toy store rises from the ashes.
There are other brands I've seen (especially in the arts and crafts area and infants) that I always see in the clearance aisle but I don't remember the names. Oh, and they were also terrible at buying board games. How many clearance endcaps has everyone else seen over the years of junk games like Dino Stomp, Gooey Louie or Doggie Doo?
Fao Schwartz(sp?) Was also an unnecessary category. No one was going to pay $100 for a floor piano regardless of the name on it.
I think stocking the super expensive stuff is up to the discretion of the actual store, not really overall TRU policy, per se. For instance, one of the stores I go to usually carries the really expensive and large Lego sets while another one I go to rarely ever does. And they aren't even store returns as they typically have multiple copies of them. That same store also carries a lot more of the really expensive Transformers toys and diecast cars than the other store. I see the same at other TRUs that I go to infrequently; the quantity of "high end" merchandise varies across the board. It could just be that the store you normally go to chose to consistently order the really expensive stuff.
The demographics of the area certainly play a role in what is stocked. Stores in affluent areas will carry more of the higher end stuff whereas a store in a less well-off area will focus more on affordable items.
Once upon a time, TRU had great LEGO deals like BOGO50 and B2 get 1 free before Bain moved in.
Is this something kids these days (and of the future) want or find valuable?
This will change the way TRU or any toy store decides to approach their brick and mortar model.
http://money.cnn.com/2018/03/20/news/companies/kb-toys-toys-r-us/index.html
Consider - you pay a fee (daily, monthly, yearly) for admission to the play area, where you can play with certain things - where the certain things are rotated periodically to provide variety and keep you coming back. This is already done by various toy clubs, including Lego specific toy clubs. However, TRU would ALSO have the toy show room - where you can then BUY stuff you like, and parents see you playing with - and maybe strike while the moment is hot. It ALSO gives parents a way to shop for toys while keeping their kids occupied. Also birthday party area, events, etc. It also provides some reoccurring revenue, a way to actually ENGAGE with customers. It could get a lot of people into the store that otherwise wouldn't be there - and that increased exposure provides an opportunity to convert people into product customers.
All of this is relatively cheap and easy to do, is something that can't be done by on-line only retailers, and not easily done by general-purpose retailers like Walmart and Target. Yes, it requires the stores to give up some square footage from the sales floor, but you don't get something for nothing. In any event, I think they should have given something along these lines a go. Added bonus points if they could turn some of their parking lot area into an outdoor playground, to make the idea usable for a wider variety of toys.