Toys R Us files Chapter 11

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Atarifever
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Re: Toys R Us files Chapter 11

Postby Atarifever » March 11th, 2018, 8:03 pm

Did Toys R Us ever lean into their old nostalgia stuff in the U.S. for marketing? Up here, they hardly ever used the Toy's R Us kid music or old commercials (I believe I saw them do it briefly in one campaign). Zellers also never leaned into their history in marketing, and they're gone too. I think some of these companies miss the fact that they can sell to nostalgia to get people into the store (and in Toys R Us, then sell to the kids the parents bring in). Both A&W Canada (practically an entirely different chain than in the U.S. now) and Sobeys have taken this tactic to pretty great effect. (The Sobey's Star of Christmas throwback commercials have practically made their commercials a Christmas carol in Eastern Canada: https://www.youtube.com/watch?v=oZzEzieGNBI )

I always felt Toys R Us were too busy trying to be Wal-Mart and forgot that for a lot of people they were a bigger part of the culture than Wal-Mart has ever been. I bring my kids there all the time. Not so much for anything I can't get anywhere else, but because wandering through a huge Toys R Us still feels like a very special part of being a kid to me, so I want that for them too.

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scotland
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Re: Toys R Us files Chapter 11

Postby scotland » March 12th, 2018, 8:43 am

Atarifever wrote: Did Toys R Us ever lean into their old nostalgia stuff in the U.S. for marketing?
I always felt Toys R Us were too busy trying to be Wal-Mart and forgot that for a lot of people they were a bigger part of the culture than Wal-Mart has ever been.


That's a neat point, and no - not to my knowledge. In fact, very few companies lean into nostalgia. Coca cola learned with New Coke that nostalgia is part of their brand. Disney does it, but most companies don't want to seem old. Nostalgia is something Amazon couldn't not compete on, or compete on that sensory overload of being in a toy store.

You are right - Toys R Us could have used being a toy wonderland, with Be a Toys R Us kid, and the whole experience of running down an aisle of toys.

pacman000
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Re: Toys R Us files Chapter 11

Postby pacman000 » March 12th, 2018, 9:47 am

Nostalgic Amazon Ad:

"Remember the mid-90's? You went to Lycos, typed in CD's, and, after scrolling past some...sketchy sites you found CDNow. You printed off an order form, faxed it in at work when the boss wasn't looking, and a few weeks later you got a box of CDs! It was amazing! The start of a new era! Well, we bought CDNow in 1999! The Domain name still redirects to our main page! Try it! and remember the good old days when Yahoo was king there were a dozen search engines which only sorta worked! Come to Amazon, your online store since '96, and the successor to CDNow!"

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Retro STrife
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Re: Toys R Us files Chapter 11

Postby Retro STrife » March 12th, 2018, 12:19 pm

Good point on the nostalgia, Atarifever. Especially since Toys R Us has really gone downhill in recent years... it survives by being the only big toystore in town, rather than actually being a redeeming toystore. So you'd think that they would lean into their history more, and focus ads more on the parents and getting them to want to take their kids there by reminding them of what it was like going there when they were kids. They haven't done that though.

Tying it back into gaming, Nintendo is excellent at this. IMO Nintendo is one of the best companies in the world at leveraging their history to keep their brand strong, even during times when their current output is weak. It's too bad Toys R Us wasn't better at that.

ESauce
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Re: Toys R Us files Chapter 11

Postby ESauce » March 12th, 2018, 4:45 pm

GTS wrote:Remember it's these big stores like Toys R Us that once put a lot of mom and pop stores out of business. One day, something will put Amazon out of business.


Actually one nice thing about the internet age is that Mom and pop stores seem to be increasing. If people want to just buy something at the lowest price they go to Amazon. If people want customer service they’ll go to a mom and pop store where the manager or owner is almost always nearby to help. The big box stores are just the worst of both worlds. They have higher prices than Amazon due to needing retail space, and worst customer service than small shops since it’s so impersonal.

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scotland
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Re: Toys R Us files Chapter 11

Postby scotland » March 13th, 2018, 12:15 pm

ESauce wrote:
GTS wrote:Remember it's these big stores like Toys R Us that once put a lot of mom and pop stores out of business. One day, something will put Amazon out of business.


Actually one nice thing about the internet age is that Mom and pop stores seem to be increasing. If people want to just buy something at the lowest price they go to Amazon. If people want customer service they’ll go to a mom and pop store where the manager or owner is almost always nearby to help. The big box stores are just the worst of both worlds. They have higher prices than Amazon due to needing retail space, and worst customer service than small shops since it’s so impersonal.


I agree with all of that. For decades, mom and pops could not buy from their distributors at the prices the big box stores could retail items. Now, with Amazon has prices, and its review/FAQ system may not as good as a mom and pop store owner, but it beats the people employed by Big Box stores. In my area, I watched Home Depot come in, hire up knowledgeable help, but as the years went by, it seemed that the people in the aisles knew less and less (or were being asked to work aisles outside their knowledge base).

In discussing this, someone brought up how American culture has shifted, and its not just internet online shopping. In the 1970s and 80s, when the Malls and BIg Box stores were rising, many kids were 'free range' after school, and might hang out at the Mall or spend much of a Saturday there. Now, kids are in more structured after school activities, (and maybe more homework too from what I see kids today compared to my day) and there seems to be lots more events to go to. In my area, Fall and Spring have exploded in the number of small festivals and activities.

Some ways to compete (in the US at least) might be to either 1) make it a destination, a big neat experience you want to repeat several times a year. This is a practice stores like American Girl Doll have tried (and up to recently, with good success - although they are in a rough patch too). You tack on a restaurant, and stuff to do - like a big Thomas set, or a big piano, or free play arcade games, etc.

The other might be to 2) go local - put a Toys R Us Express so that one is never that far away - basically a franchised mom and pop with access to the lower prices that buying in huge quantity gives you. A small store can special order anything and have it in one or two days, plus be an access point for parties, etc. Yes, they would still have to compete with Wal-Mart and Amazon, so maybe it wouldn't work.

pacman000
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Re: Toys R Us files Chapter 11

Postby pacman000 » March 14th, 2018, 11:58 pm

800 stores will close over the next few months.

Let's see...

800 stores. If each store keeps $100,000 worth of merchandise in stock the toy industry may have an $80 million wright off.

And that's not including some stores in Europe. On the plus side bankruptcy usually doesn't cancel all debt; the question is this: will there be enough money left over from the liquidation to pay the toy companies after paying other debtors? Or will Toys R Us' suppliers be paid first? And if so, how much?

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scotland
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Re: Toys R Us files Chapter 11

Postby scotland » March 15th, 2018, 6:31 am

Its a private company, held by private equity firms. I thought this would mean the shareholders in those equity firms, having taken a business risk, would get paid last (after those toy suppliers) - but that may not be the case. It may have been a condition of investment that those shareholders get liquidation preference. If so, then general creditors, like those suppliers, are basically the bottom of the payment list. Toy company Mattel, for instance, has been on a fairly long decline, so I can't imagine this would help - but maybe the already took steps to reduce their risk since Toys R Us has been in trouble since at least 2005 and the leveraged buyout that loaded them up with all this debt to begin with.

Another issue I heard about was running out of stock. Toys may have shifted where the most popular toys really dominate marketshare, so you need a lot of what's popular, but less variety - which would help a store like Wal Mart but hurt a Toys R Us. Once a Toys R Us ran out of the hot items of the season, customers just went elsewhere instead of buying whatever other toys may have been on the shelves.

I guess it means that there are going to be a few weeks of closeout sales at Toys R Us, and then remaining stock sold to places like their outside the US stores, or maybe Big Lots, 5 Below, Ollies, etc.

GTS
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Re: Toys R Us files Chapter 11

Postby GTS » March 15th, 2018, 8:19 am

CNN Money posted another article about the matter entitled 'Amazon didn't kill Toys 'R' Us. Here's what did' http://money.cnn.com/2018/03/15/news/co ... index.html

Basically it says that they've had debt problems since 2005 (as someone else said), and that they were never able to have enough money to reinvest in their stores, or pay the wages needed to attract the best workers.

crimefighter
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Re: Toys R Us files Chapter 11

Postby crimefighter » March 18th, 2018, 11:17 pm

"In discussing this, someone brought up how American culture has shifted, and its not just internet online shopping. In the 1970s and 80s, when the Malls and BIg Box stores were rising, many kids were 'free range' after school, and might hang out at the Mall or spend much of a Saturday there. Now, kids are in more structured after school activities, (and maybe more homework too from what I see kids today compared to my day) and there seems to be lots more events to go to. In my area, Fall and Spring have exploded in the number of small festivals and activities. "


From what I've been told, adults shunned the mall because of congregating teenagers and preferred the smaller strip malls where they could get in and get out quickly without being hassled by them. Course with the malls emptying out of stores, the teenagers have nothing to do in there and thus the candle burns at both ends accelerating the demise of the place.


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