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Toys R Us Clearance Coming Soon — Parallax Forums

Toys R Us Clearance Coming Soon

GordonMcCombGordonMcComb Posts: 3,366
edited 2018-03-15 00:05 in General Discussion
From the Good News, Bad News Department: Toys R Us has announced they can't return to solvency, so they are closing all 800 US stores (as well as all UK stores). That's the bad news, but the good news is that we can expect some pretty nice clearance sales.

This will also likely cause a negative affect on Wal-Mart and other retailers who have basically eaten TRU's lunch over the last decade. We should expect some blowout sales from them as well, as they try to counter the heavy discounting during the clearance sales.

To Erco: I hope this doesn't negatively affect you. I know you are no longer with Mattel, who I hear is expected to announce more layoffs. I'm hopeful the loss of the largest stand-alone toy retailer doesn't cause too much long-term damage to the toy industry. Maybe it'll end up helping. Before TRU most toys were purchased from department and neighborhood drug stores, even supermarkets carried Remco, Ideal, Mattel, MB, and the others. If we can get back to that kind of decentralization it might be a win-win for everyone (except Jeff Bezos).

Comments

  • Phil Pilgrim (PhiPi)Phil Pilgrim (PhiPi) Posts: 23,514
    edited 2018-03-15 00:14
    Toys shops have always been well-represented in my little tourist burg, but they come and go. (Port Townsend in the winter is like a stage between acts.) We once had a store that exclusively sold games and another that concentrated on toys of European origin (including Lego, a Danish company). But those are gone now. Whistle Stop Toys has become a mainstay, along with the local drug store, which carries a great selection of jigsaw puzzles. Then there are the ticky-tack tourist shops -- too many to mention -- that carry rather more eclectic stuff. But if you're looking for K-nex or Hot Wheels, you need to go to the big city. Where, I'm just not sure anymore with the demise of TRU. Kmart maybe?

    -Phil
  • ercoerco Posts: 20,244
    edited 2018-03-15 18:31
    It's sad that TRU is closing. Doom & gloomers insist that all toy sales will decrease 15-20% and the industry is in danger. In reality, online shopping has taken a chunk and something had to give. TRU was overextended and was the first to fall. Mattel especially will suffer, they extended far too much credit to TRU. Mattel has numerous other serious internal issues to deal with... it's a great place to be from.

    Hasbro, Spinmaster & Wowwee are doing much better, they are getting my full attention these days. :)

    So yes, maybe we can't be Toys R Us kids much longer. But I'll see you at the clearance sales... plenty of hackable toys to be had at bargain prices.

    "Retail is for suckers!" erco
  • Ken GraceyKen Gracey Posts: 7,386
    edited 2018-03-15 19:01
    erco wrote: »
    But I'll see you at the clearance sales... plenty of hackable toys to be had at bargain prices.

    I knew this was coming! Show us what you find.

    TRU collapse is the same process that RadioShack went through. Corporate buyers start to make last-ditch efforts to shore up the stores the way they've done in the past, suppliers extend credit thinking everything is great, and the retail giant is entirely unable to unwind the mess they're in because it takes a lot of time to reduce expenses related to leases, inventory, employees, etc. And, knowing bankruptcy protection is right around the corner there's little motivation except to drive the whole mess right into the ground full-throttle.

    Ken Gracey
  • Ken,
    Yep, and we are going to see more of this over the next 5-10 years.
    The future is little mom and pop places covering super tiny markets, and gigantic online stores. All the middle ground either collapses or turns into one of those two.

    Also, the little guys will supplement their income by selling on the online stores (see amazon/ebay/etc. now).
  • there's little motivation except to drive the whole mess right into the ground full-throttle.

    Had to laugh at that one, but well stated.
  • TRU's troubles were made a lot worse when private equity firms arranged for a VERY highly leveraged buyout, using in large part the company's real estate as collateral for the debt. At the end of the day TRU was saddled with paying annual interest on some $7+ billion. That pays for a lot of LEGOs. They couldn't invest in modernizing their stores or online experience.

    I'm not sure if TRU's buyout was hostile, but even if the arrangement had board approval, the combination of excessive debt, lack of foresight, and bad timing rears its ugly head once more. In 2005 how were they to know consumers would prefer online buying? In 1993 Sears gave up its catalog business (Amazon on steroids in its day), when the Web was still in its infancy. In 1994 Amazon registered their domain name. Who knows what Sears could have done had it kept its catalog sales.

    Lack of insight affects us all -- I could have written the first book on HTML in the 90s had I been smart. There's something to be said about valuing disruptive technologies. Amazon has made a science of it.



  • But if you're looking for K-nex or Hot Wheels, you need to go to the big city. Where, I'm just not sure anymore with the demise of TRU. Kmart maybe?

    -Phil

    Not here in Tulsa. They shuttered the last store in this area last year.

    And I suspect that Sears will be next. We're down to one store, and the aisles are getting wider and wider (less merchandise on the floor).

    We do have some local mom-and-pop toy stores. But the last time I went in one, to get a gift for one of my grandkids, the prices were list + 30%, on sale for 10% off. Big deal.

    So I do most of my toy buying at Walmart (disclosure - my son-in-law works for them).

    The last time I shopped at TRU they only had 1/2 of the advertised items (Barbie). And they were spread across three different parts of the store for some reason.

    Walter

  • I still shop at Sears and K-Mart, but online only. They're the only ones that have the crepe sole canvas shoes I like.
  • I was never much of a TRU kind of fan, overpriced molded plastics with blinking lights and endless noises, but I will stop by to grab a great deal for the grandson.
  • Not much of a closeout. Only reason to take advantage was to burn some gift cards for the kiddo before the cards go worthless.
  • ercoerco Posts: 20,244
    Agreed, it will be a slow painful death for that company. One interesting side note is that the CEO of MGA Toys has started a GoFundMe campaign and donated $200 million to buy up many of the TRU stores and keep them going.

    https://www.toynews-online.biz/retail/mgas-isaac-larian-rallies-hope-for-tru-with-gofundme-campaign
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