Babies R Us and Toys R Us Going Out of Business
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Inside the wild and tumultuous history of Toys R Us, a once beloved children's brand that just closed its last 2 stores in the US
Updated
2021-02-02T14:32:45Z
Toys R Us was founded in 1948 by Charles Lazarus after he returned from World War II.
Lazarus was inspired by what was then the emerging post-war "baby boom" and sought a way to capitalize.
The company started as a baby goods and furniture store called Children's Bargain Town in Washington, DC.
In the subsequent years, Lazarus began expanding into toys and the company officially adopted the name Toys R Us in 1957.
Over the next two decades, Toys R Us played a significant role in putting iconic toys on the map for American youngsters, such as Mr. Potato Head.
Lazarus was able to corner the market by buying and selling so many toys that he could negotiate more lucrative contracts than his competitors.
In 1966, Lazarus sold the company to Interstate Sales to help finance a larger national expansion.
According to Encyclopedia.com, he transitioned from chief executive to head the Toys R Us division, which was already thriving at profits of $12 million.
In 1969, Toys R Us developed its beloved Geoffrey the Giraffe character.
The mascot became synonymous with the brand and its advertising campaigns over the decades.
Lazarus sold off struggling pieces of the business and got the company back on track.
In 1978, it was able to file its initial public offering.
In 1983, the company opened a clothing store spinoff called Kids R Us.
The Toys R Us empire was steadily expanding.
Lazarus eventually stepped down as chief executive in 1994.
The move signified a series of woes for the brand, including high executive turnover and the looming pressure of ecommerce.
Building upon the success of Kids R Us, the company expanded into baby clothing with Babies R Us in 1996.
The stores saw success with selling baby-related merchandise.
In the 1990s and early aughts, Toys R Us began expanding into major cities like New York.
In the Big Apple, Toys R Us opened its iconic multi-story store with a fully functioning Ferris wheel in 2001.
Around this time, Toys R Us and its spinoff brands began to experience mounting competition from fellow big-box stores like Walmart and Target.
In fact, according to The Associated Press, in 1998, Walmart had already surpassed the company as the top US toy seller.
In 2005, a conglomerate of private equity firms — including Bain Capital, Kohlberg Kravis Roberts, and Vornado Realty Trust — purchased Toys R Us for $6.6 billion, taking the company private in the process.
According to USA Today, the plan was to boost Toys R Us sales and position the company for a stock offering that would allow investors to cash out.
In 2010 the company registered once again to go public.
However, by 2013 it withdrew from the process due to sales slumps, according to USA Today.
In 2015, Dave Brandon – formerly the CEO of Domino's Pizza — took over the helm of Toys R Us.
According to USA Today, Brandon marked the fourth CEO over the course of 16 years "tasked with turning the company around."
Still, the company continued to struggle, especially during the 2016 holiday season.
According to Business Insider, the chain lost significant traction to ecommerce giants like Amazon, Target, and Walmart.
The company officially filed for Chapter 11 bankruptcy protection in September 2017.
The chain hoped to gain control of its debt and continue to operate its 1,600 stores around the world as normal, according to the Washington Post.
With its hopes for a financial savior ultimately dashed, Toys R Us announced in March 2018 that it would liquidate and permanently close all of its 700-plus stores across the US.
According to Business Insider, the decision threatened the jobs of the 33,000 people employed by Toys R Us at the time.
That same year, the company issued an emotional goodbye as it prepared to permanently shutter its Toys R Us and Babies R Us websites.
"We encourage you to stop by your local store and take full advantage of the deep discounts and deals available," the message read. "Thank you for your business and support over the years."
It was later announced that gift-card holders could use any remaining funds at Bed Bath & Beyond stores, according to Business Insider.
The CEO of the toy company MGA Entertainment issued a last-minute bid of $890 million to save the company.
However, the offer was ultimately rejected by Toys R Us.
Throughout the rest of 2018, stores like Walmart began to position themselves to take over the void left behind in the market by Toys R Us.
The chain strategized to overtake Toys R Us's legacy by adding mass amounts of baby-related products to its inventory.
In February 2019, Toys R Us appeared to rise from the dead when Tru Kids Brands purchased the rights to the company.
Tru Kids Brands also purchased the rights to the Geoffrey the Giraffe mascot with plans to revitalize it.
In October 2019, the company announced it was back online but with a catch — you couldn't actually buy anything directly from the Toys R Us site.
Instead, users would be directed to make purchases from Target's website.
In fall 2019, empty Toys R Us stores were once again used for Halloween purposes — this time to host haunted houses.
The haunted houses were a far cry from the joy-filled Toys R Us stores of the 1990s.
In August 2020, it was confirmed that Toys R Us had ended its partnership with Target.
Toys R Us would now partner with Amazon as its fulfillment partner, according to Business Insider.
The coronavirus pandemic has decimated in-store sales for many retailers, including Toys R Us.
CNBC reported in January 2021 that the retailer was facing hardships due to dwindling in-store sales amid the coronavirus pandemic. As a result, the chain's last two remaining stores in the US officially shuttered for good, bringing an end to a years-long ordeal to attempt to revitalize the brand.
The final stores were in Texas and New Jersey, Bloomberg reported.
"Consumer demand in the toy category and for Toys 'R' Us remains strong and we will continue to invest in the channels where the customer wants to experience our brand," a Tru Kids spokesperson told CNBC.
Read more: The last 2 Toys 'R' Us stores in the US have closed down after the COVID-19 pandemic hit sales
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Babies R Us and Toys R Us Going Out of Business
Source: https://www.businessinsider.com/the-tumultuous-history-of-toys-r-us-photos-2020-8#:~:text=Toys%20R%20Us%20just%20closed,continue%20as%20an%20online%20retailer.
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