As a child, you most likely bought your toy from a store, most likely a big store like Toys R Us. Toys R Us was never a really "large" corporation, where they had thousands of locations IN numerous countries. They didn't have to because each store was like a safe haven, a huge store that had a large radius. Almost every Toys R Us is huge, with high roofs and toys of any kind.
Now let's analyze what happened. Toys R Us had too many operating costs; each store was way too large and sometimes it gave a threatening feeling to customers. Imagine shopping by yourself in a huge store with like two customers and a couple of employees. Toys R Us also did not jump onto the e-commerce train in time. Well they did, but it was almost like a deal with the devil. It partnered with Amazon in a deal that seemed mutually-beneficial where its products would be sold on Amazon but would be the sole supplier of toys. The thing is that Toys R Us sacrificed too mush; their website directed to Amazon's storefront. Amazon, however, started carrying other toys and Toys R Us sued. Amazon sued back saying that Toys R Us didn't keep enough stock. Eventually, Toys R Us did develop its own shopping site, but it may have been too late, or at least they did not care to advertise it enough while simultaneously revamping its stores to draw more customers.
Borders shared the same fate, where it did not develop its online shop enough. Now it seems that Kohl's is doing the same, by selling Amazon products in its stores. Let's hope it won't fail like its predecessors did.
The Toys R Us Chapter 11 bankruptcy doesn't mean it will necessarily close all of its stores; there's just going to be some restructuring. If Toys R Us can open stores in better locations vs some large empty shopping center, or if it can advertise its online shopping even more, then Toys R Us may be able to climb out of the $5 billion in debt. The may be difficult for its suppliers though. Mattel, one of the largest toy companies in the world, has seems its stock dip 6%. It's short interest is huge, which is never a good thing. Short interest is where investors will sell their stocks short,and have not yet closed out. It's a good way to tell if people thing the stock is ready to drop.
But let's face it, toys are becoming a bit obsolete. Some toys kids just aren't interested in anymore. Kids are more drawn into games on their tablets and smartphones. It's the sad truth. If Toys R Us could promote more mobile gaming or something, then it might help also. There may be time for Toys R Us to bring some changes, especially with the holiday season lurking around. You better bet that people are using Amazon or Walmart.com to shop. Toys R Us needs to do some massive advertising to secure some profit.
http://www.businessinsider.com/toys-r-us-bankruptcy-has-short-sellers-betting-big-against-mattel-2017-9
http://www.businessinsider.com/is-toys-r-us-closing-what-bankruptcy-means-for-stores-2017-9
http://www.businessinsider.com/toys-r-us-bankruptcy-is-a-warning-for-kohls-amazon-deal-2017-9
bring back Toys R US!!
ReplyDelete