Can Toys “R” Us Protect Itself from Bankruptcy!?

Roberto Vivas, Staff Writer

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Have you heard the news? “Late Monday, [September 18,] Toys ‘R’ Us announced that it scrounged up $3 billion in bankruptcy financing…,” reports CNN. This information has already been noticed by the children of the 1980’s, who most, at the time, only ever wanted a trip to Toys “R” Us. As the New Yorker’s Amy Merrick describes, “The chief executive of Toys ‘R’ Us, David A. Brandon, filed a statement with the bankruptcy court…,” in which he states that the retailer plans to renovate their buildings and develop an augmented reality experience. So how did Toys “R” Us end up like this?

From the start of the 21st century, Toys “R” Us has had plenty of problems to deal with. “Enormous debt levels are its most immediate problem,” suggested the BBC on September 19th. The subject pertains to the more than $5 billion in long term debt that multiple news outlets have mentioned like CNN, BBC, the Economist, and the New Yorker. Toys “R” Us’ competition has also increased with the introduction and progression of big-box stores and eCommerce. As the Economist emphasizes, “Cowen, a financial-services firm, expects 41% of toys and games in America to be purchased online this year, about twice the proportion sourced from the internet in 2009.” Finally, Toys “R” Us was too slow to provide for the demand of newer products, such as digital apps, tablets, and other electronic devices rather than toy guns, action figures, and other toys, that the children of this generation want.

Toys “R” Us must make major changes in order to keep the business relevant. Their entire inventory must be updated; their marketing style must improve to sell more items; and they must try to make themselves different and unique to other firms. Doing this will surely secure the retailer a permanent spot in the hearts and minds of future children.

Sources

  1. The 69-year old Toys ‘R’ Us was once the mecca of kids’ gifts. But it was eventually overtaken Walmart, and ultimately Amazon. “Toys ‘R’ Us Files for Bankruptcy Protection.”CNNMoney, Cable News Network, money.cnn.com/2017/09/19/news/companies/toys-r-us-bankruptcy-chapter-11/index.html.
  2. Merrick, Amy. “How Toys R Us Succumbed to Its Nasty Debt Problem.” The New Yorker, The New Yorker, 21 Sept. 2017, newyorker.com/business/currency/how-toys-r-us-succumbed-to-its-nasty-debt-problem.
  3. “Toys.” The Economist, The Economist Newspaper, 23 Sept. 2017, economist.com/news/business-and-finance/21729375-rise-e-commerce-did-americas-former-favourite-toys-r-us-files-bankruptcy.
  4. “Toys ‘R’ Us Files for Bankruptcy Protection in US.” BBC News, BBC, 19 Sept. 2017, www.bbc.com/news/business-41316205.
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