Retail

Toys 'R' Us to Be Back for the Holidays

Douglas A. McIntyre

Published: April 26, 2019 8:33 am

Last Updated: January 6, 2020 5:13 am

Toys “R” Us, the victim of high debt and consumer patterns toward buying online, collapsed and closed its entire store system. It will be back for the holidays, according to a major source, although its new stores will be small.

The last Toys “R” Us store closed on June 29 of last year. The company filed for bankruptcy in September 2017. When it filed, it had a debt loan of $4.9 billion. Revenue had fallen far enough and losses had risen fast enough that it could not even pay the interest on its debt. As its owners liquidated the company, approximately 30,000 people lost their jobs. Retail in general was so bad that several companies in the sector were among brands most likely to disappear

According to The New York Post, this holiday season people will be able to shop at Toys “R” Us, which they could not do during the same period last year. The paper reported: “Tru Kids Brands, a licensing firm formed last year by creditors following the toy chain’s September 2017 bankruptcy filing, plans to open a handful of US stores in time for the holidays that will span about 10,000 square feet each.” The head of Tru Kids confirmed the news: “We are a little startup company now.”

Toys “R” Us was founded in 1957 by retail legend Charles Lazarus. The company eventually had over 1,000 stores in the United States and another 500 overseas. At its peak, in 2001, it opened a flagship store in Herald Square in New York City. It covered 110,000 square feet of space and cost $35 million to build.

In 2005, a group of private equity firms, which included Bain Capital Partners, Kohlberg Kravis Roberts and Vornado Realty Trust, paid $6.6 billion. Toys “R” use was unable to pay even a small portion of that back. The high debt even frightened some suppliers, which became wary about whether they would get paid for merchandise sent to the company.

The new Toys”R” Us may be extremely small compared to its former national footprint. But the new plans will bring back a retail icon that millions of people remember as the place they took their children to buy them toys for the holidays. It was on a list that has grown immensely recently — that of the retailers that closed the most stores.