Toys ‘R’ Us Rises From Retail Graveyard – But Faces Tough Odds

Toys ‘R’ Us Rises From Retail Graveyard – But Faces Tough Odds

September 30, 2023

Toys ‘R’ Us is the latest nostalgic brand trying to claw its way out of the retail graveyard, joining the ranks of deceased chains like Borders, Kmart, and Radio Shack. People buried it there too soon. According to The New York Times, it will open over 20 stores next year. It will also have mini-stores in places like airports. The move is a long shot and spirited effort to revive a famous brand.

According to the Times, Yehuda Shmidman, the chairman and chief executive of WHP Global, the company that owns the brand, said the retailer “is growing fast and our expansion into air, land and sea is a testament to the brand’s strength.” His excitement has clouded his judgment.

Toys ‘R’ Us is about seven decades old. Several private equity firms bought it in 2005 for $6.3 billion. Toys ‘R’ Us had 1,500 stores. It was saddled with massive debt due to the buyout, and its cash flow could not handle the weight. It went bankrupt in 2017. (These are discontinued classic toys you can probably still find.)

Debt was not the only reason Toys ‘R’ Us went under. was a culprit, just as it had been when other large retailers went under. Walmart and Target also saw toys as a lucrative business.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

The relaunch of Toys ‘R’ Us faces trouble. Buying inventory at rock-bottom prices is easy for mega-buyers like Walmart. Toys ‘R’ Us won’t have that leverage. It will also have a tiny footprint geographically, which means most of the shopping public won’t have access to one of its stores.

While it is good to see a once important brand revived, it is sad that it is done in a way that makes it such a long shot.

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.

Source: Read Full Article