Toys R Us the king of the toy castle in 1990s, it was the
biggest toy seller in the US, expanding rapidly as it pushed out smaller
chains. But Walmart started selling more toys than Toys R Us.
"In
Toys' case, high leverage remaining from the 2005 leveraged buyout reduced
financial flexibility, which in turn limited investment, leading to the erosion
of the company's competitive position at a time when its primary competitors
such as Walmart, Amazon, and Target were running on all cylinders," said
Charlie O'Shea, a Moody's analyst.
Toys R Us shuttered its doors in the U.S., leaving in its
wake a great deal of sadness, pockets of anger, 30,000 workers are out of a job and some slim hope. In the liquidation filing, Toys R
Us blamed its poor holiday
performance on Walmart, Target, and Amazon pricing their toys low
enough that it couldn't compete and make a profit. As more Americans became shop online, the company’s cavernous
suburban stores became outdated and the $5 billion debt from its private equity
owners too onerous.
The three main
reasons of Toys R Us frailer
1. New kids:
"Kids are
changing," says Kate Hardcastle.
Kids in five or
six years old now are addicted to their phones, Birthday presents now can’t be
a toy, as it could be a new mobile phone or tablet.
2. Priced out:
Sale's prices in
the final days of Toys R Us were as high as 95% for some items.
3. Updated products:
The kids didn’t
like the place, as it should be a place of joy. They weren't dynamic enough;
they just needed to do anything to update what they were offering.
