Sorry to be a downer…
The Rise and Fall
Toys R Us was the first ever big box toy store. A realized dream of its creator Charles Lazarus. Coming back from war Lazarus noticed a hole in the market, considering all the soldiers were talking about coming back and starting families. While his first store, selling baby furniture was opened in 1948, Children’s Bargain Store was transformed into Toys R Us in 1957.
And business boomed. New toys like Barbie and Mr. Potato Head were being produced. And TV toy ads were telling kids to buy from Toys R Us.
Fast forward to the 1980s and Toys R Us introduced its iconic Toys R Us Kid commercial jingle. And Geoffrey the Giraffe had been promoting the brand for 7 years now.
The company was worth $500 million in 1950, went public in 1978, skyrocketing to a worth of $12 billion in 1990.
Lazarus stepped down as CEO in 1994. Toys R Us returned to being a private company in 2005. And their leveraged buyout failed. In order to compete with stores like Wal-Mart and online presences like Amazon, they cut down on their number of toy offerings, their biggest draw, and instead attempted to cut prices.
By 2015, the company had gone through 4 CEOs in 16 years, and continued restructuring attempts. In 2018 Toys R Us once again filed for bankruptcy. They had bounced back from Bankruptcy in 1974, under Lazarus’ guidance, but this time was different. While Lazarus had sold off unprofitable divisions, this time Toys R Us issued a plan to close 182 stores. Later that same year, it instead chose to close all 800+ U.S. stores.
The World Reacts
When the news of Toys R Us’ closing was announced the internet was in an uproar. From regular shoppers, to those feeling the 1980s nostalgia, no one wanted Toys R Us to go. As they worked toward closing down Toys R Us issued sales on much of their toy stock and store fixtures. In the final few days items were up to 80% off. And business seemed to boom once again, only too little too late.
Making a Comeback?
The initial sign that Toys R Us wasn’t truly gone, was its line of Geoffrey’s Toy Box toys it stocked in Kroger’s grocery stores for the 2018 holiday season. A total of 35 toys from 6 brands. While I don’t have the overall sales numbers, people were generally excited about the opportunity to get their hands on a few more TRU items.
Under the new company Tru Kids, TRU has released some of its plans going forward. They won’t make the mistake of ignoring the online market again, and they hope to make their store fronts more interactive. They also plan to open 70 new stores this year in Asia, Europe and India. TRU plans for the U.S. haven’t yet been announced. Their largest push, however seems to be with ecommerce.
What it all means
There’s still a lot to learn about the Tru Kids path forward, but with their focus on online sales, you won’t ever be able to re-experience that Toys R Us nostalgia. The draw of the massive retailer for so many years was the magic of going in and seeing all the toys first hand, making Christmas and Birthday wish lists, grabbing and holding a new toy right from the shelf. And now, that experience falls flat with the options only living in the online realm. Ecommerce is the way of the future, there’s no stopping it. Just don’t get your hopes up about any TRU come back announcements until we can physically feel it’s presence ourselves.
Sources:
- Inside the Rise and Fall of Toys ‘R’ Us, History, 5/15/19
- Toys R Us timeline: History of the nation’s top toy chain, USA Today, 5/15/18
- Toys R Us comes crawling back, just in time for the holidays, Business, The Washington Post, 11/22/18
- Toys”R”Us Emerges with New Vision, Team & Global Strategy, Press Release, Toys R Us, 2/11/19
- Toys ‘R’ Us Is Making A Comeback As Tru Kids — With A Modern Customer Approach, Forbes, 2/12/19
I used to love to visit the two TRU stores we had in Adelaide SA and the reason was, as you say that it was such fun to actually see everything there. I was starting out as a Barbie collector and TRU had a whole aisle filled both sides with Mattel products and often some in another display as well, they had other types of fashion dolls, baby dolls and dressed dolls so there was always a lot for me to look at. I did start to buy online to get things that were not available in Australia or vintage dolls but my first preference was always to shop in person. I guess kids today may not miss that as much though as they are used to looking at screens.
You have a point. I do love online shopping, but there is a magic, and often a practical purpose, to being able to scan physical shelves, and to have the item in your hands immediately. We will have to see what is to come.
Interesting. Thanks for doing the leg work on this one.
Of course. Glad you enjoyed.