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+---- Thread: Business Failures (/thread-266.html)
Business Failures - pbrower2a - 07-12-2016
An attempt to revive an old T4T forum in the event that much of the American economy goes belly-up again.
Noteworthy failures can include:
1. Deaths of once-prominent businesses, like former Fortune 500 companies. Foreign firms may be included.
Deaths include bankruptcies, liquidation, and forced mergers.
2. Governments in receivership or bankruptcy. That includes state, municipal, and county governments.
3. High-profile organizations such as unions, colleges and universities, symphony orchestras, opera companies, high-profile churches, and foundations.
4. High-end marketers irrespective of size -- let us say Cartier or Gucci if such were so.
RE: Business Failures - pbrower2a - 08-25-2016
Do you remember the iconic Howard Johnson's chain of restaurants?
Quote:Text and photographs copyright 8/2002 – 2007 by Glenn Wells, except as noted
For most of the twentieth century, the orange roof of Howard Johnson’s was a familiar sight along the great American roadside. When the motorist spotted a Howard Johnson’s, he knew exactly what to expect – with standardized menus and building designs, a Howard Johnson’s miles away felt as familiar and comforting as the one back home.
Howard Deering Johnson was a struggling businessman in 1925 when he put a new twist on a favorite American treat, ice cream. Using his mother’s recipe, he produced ice cream with a butterfat content far exceeding that of other brands – in essence, creating a “super-premium” ice cream years before Haagen-Dazs. After a slow start, customers flocked to Johnson’s stands at beaches along the Massachusetts shore, and Johnson kept adding new kinds of ice cream until he hit the now-familiar “28 Flavors.”
It would be the roadside restaurant, however, that would propel Howard Johnson to fame and fortune. Johnson seemed to have a keen eye for what Americans liked, and was able to combine elements of various styles of roadside dining into one package that would be appealing to the greatest number of people.
From the early days of motoring, establishments sprouted along the roadways to feed travelers, but each of these had some drawback that hindered their growth. There were tea rooms, whose homey atmosphere appealed to women, but in this era it was usually men who were driving the car. There were diners, which men liked, but women were not likely to want to sit on a counter stool in the days before booth service was common. Finally, there were hot dog stands and other casual food stops, often operating out of shacks or other unsavory looking buildings, where the quality of the food was open to question.
For his creation, Johnson borrowed a building type that was well-known and loved throughout New England: the large Colonial home. In the early years, there was some variation in the size and detailing of the buildings, partly because many of them were built by franchisees. As the 1930s came to a close, however, the style became refined and more uniform: a Colonial building sided in clapboards painted white, multi-paned windows, three dormers, and a cupola with a clock mounted on the front. This handsome style fit well in the New England towns where Johnson opened his restaurants, but Johnson added a twist of his own: a brilliant orange roof, guaranteed to catch the eye of the passing motorist. The cupola was also topped off with a weathervane featuring an outline of Simple Simon and the Pieman, a trademark developed for Howard Johnson’s by artist John Alcott.
![[Image: thumbs_woodbridge.jpg]](http://www.roadsidefans.com/wp-content/gallery/hojos-1/thumbs/thumbs_woodbridge.jpg)
http://www.roadsidefans.com/features/howard-johnsons
It had its niche. Many have since become other chains if they have not been demolished.
As of September the chain goes down to one last eatery. The second-to-last closes in Bangor, Maine.
http://www.huffingtonpost.com/entry/howard-johnson-closing_us_57be766ae4b02673444e7711?section=&;
RE: Business Failures - pbrower2a - 09-07-2016
The U.S. Department of Education today took a series of actions to protect students and taxpayers by banning ITT Educational Services, Inc. (ITT) from enrolling new students using federal financial aid funds, and stepping up financial oversight of the for-profit educational provider.
This move follows determinations made by the school’s accreditor, the Accrediting Council for Independent Colleges and Schools (ACICS) that ITT “is not in compliance, and is unlikely to become in compliance with [ACICS] Accreditation Criteria.” This comes amid increasingly heightened financial oversight measures put in place by the Department beginning in 2014 and continued and expanded in June 2016 due to significant concerns about ITT’s administrative capacity, organizational integrity, financial viability and ability to serve students.
“Our responsibility is first and foremost to protect students and taxpayers,” said U.S. Secretary of Education John B. King Jr. “Looking at all of the risk factors, it’s clear that we need increased financial protection and that it simply would not be responsible or in the best interest of students to allow ITT to continue enrolling new students who rely on federal student aid funds.”
As outlined in a letter sent by the Department to ITT, the school will no longer be allowed to participate in Title IV except under the following conditions:
- Enrollment restrictions: ITT may no longer enroll new students who rely on federal financial aid dollars for educational expenses;
- Disclosures to Students: ED is requiring ITT to inform current students that its accreditor has found that the institution is not in compliance, and is unlikely to become in compliance with its Accreditation Criteria;
- Compensation and Payment Limitations: ITT is prohibited from awarding raises, paying bonuses or making retention or severance payments to its executives or to paying special dividends or out of the ordinary expenditures without department approval;
- Notification of Financial Events requirements: ITT must inform the Department of any significant financial or oversight events including violations of existing loan agreements or extraordinary financial losses within ten days of such events; and
- Title IV payment method requirements (Heightened Cash Monitoring 2): ITT is required to use its own funds to initially cover Title IV aid disbursements for current students. The Department will reimburse funds to ITT after aid is disbursed to students.
Finally, ITT is required to develop teach-out agreements with other colleges that provide students with opportunities to complete their studies. Teach-out agreements are developed in the event an institution, or an institutional location, ceases operations before all enrolled students have completed their program of study.
In its August 17, 2016 Continue Show-Cause Directive Letter, ACICS continues to question ITT’s compliance with a number of the agency’s accreditation standards, finding that ITT has not demonstrated full compliance.
The standards in question are:
- “Minimal eligibility requirements” for “compliance with all applicable laws and regulations;”
- Federal and state student financial aid administration requirements;
- Financial stability, including having adequate revenues and assets to meet its responsibilities;
- Administrative capacity, including overall management and record-keeping;
- ACICS admissions and recruitment standards;
- Requirements for student achievement, as measured by retention, placement, and licensure passage rate; and
- Institutional integrity, as manifest in the efficiency and effectiveness of its overall administration of the institution.
“When we allow institutions to participate in federal student aid programs, they are obligated to responsibly manage those funds,” said U.S. Under Secretary of Education Ted Mitchell. “More importantly, we trust they will act in good faith and in the best interests of students.”
Since August 2014, ITT has been subject to intense financial and operational oversight by the Department. The school was previously placed in a Provisional Program Participation Agreement (PPPA) due to late submission of annual compliance audits and financial statements and was concurrently required to post a letter of credit in the amount of $79,707, 879 - ten percent of the Title IV aid funding received during the preceding fiscal year.
In June, the Department required ITT to post an additional $44 million to its letter of credit bringing the total surety to roughly $124 million, or 20 percent of Title IV funds received last year. This increase followed an ACICS determination that “call[s] into question the institutions’ administrative capacity, organizational integrity, financial viability and ability to serve students in a manner that complies with ACICS standards.”
The Obama Administration has placed a strong emphasis on protecting students from abusive career colleges and taken significant steps to safeguard taxpayer dollars by:
- Creating Gainful Employment rules to protect students and taxpayers and to ensure students receive an education that leads to good job prospects;
- Publishing proposed regulations that clarify, simplify, and strengthen existing regulations to grant students loan forgiveness if they were defrauded or deceived by an institution, hold financially risky institutions accountable for their behavior and prohibit the use of so-called mandatory pre-dispute arbitration clauses and class action waivers that deny students their day in court;
- Establishing tougher program integrity regulations to target misleading claims by colleges and incentives that drove recruiters to enroll students through dubious promises, require states to step up their oversight, and to ensure that only eligible students or programs receive aid;
- Strengthening oversight and compliance of the career college industry through an inter-agency task force;
- Protecting military service members, veterans, and their families from predatory actions by for-profit colleges by proposing to strengthen the 90/10 rule; and
- Calling for improved accreditation practices that focus on student outcomes.
Current ITT students may remain enrolled in classes, and can continue to apply for Title IV to complete their coursework. Students may also attempt to transfer existing credits to a new institution, or choose to pause their studies. In the event of a school closure, students may be eligible for federal loan discharge.
To learn more about today’s actions, students should visit the Federal Student Aid Announcement Page and read a blog post authored by Under Secretary Mitchell, “Increased Oversight of ITT and the Impact on Students.”
...ITT Technical Institute has since closed.
RE: Business Failures - pbrower2a - 10-03-2016
Before I go on to the next business failure, let me address college and trade schools in general.
1. The top end is OK. Yes, the elite private colleges are fiendishly expensive, but they get very good results. Of course they are selective, so they rarely take likely failures. I saw The Social Network, and I came to recognize that Harvard really is a climate for success. There's plenty of competition, and not only for grades. The competitions in rowing are never definitive for a season, and although any individual match is tightly contested on any given day, the one that comes up shortly makes the previous contest meaningless except in creating a climate of winning for particpants after graduating from Harvard.
Yes, someone can graduate from Yale, Stanford, or the University of Chicago and be a failure in life -- but that is rare.
2. The bottom end, vocational schools that make few promises but prepare one for a trade at little cost in a short time, do well enough. So it is with hairdressers, barbers, bartenders, mechanics, nurses' aides, etc. If the course is short and inexpensive and gets one a slightly-0skilled job, then the results are adequate.
3. State colleges and universities may not be as successful in turning out the Big Winners in life... but they churn out lots of schoolteachers, county agricultural agents, fish-and-wildlife officers, accountants, and scientific technicians. More costly than #2 and not as successful as #1, real success here requires grad school.
4. Near-top private colleges and universities, more expensive than #3, but perhaps better at regimenting students' lives to make successes. Low-end graduates might be seminarians (I saw Seton Hall rated as a bad buy -- until one sees that it turns out lots of Catholic priests who are among the worst-paid professionals in America). Many of these are religious in character.
5. Unselective private colleges include once-respected schools that have lost their credibility due to low performance of their students, flunk-out academies, and bad religious schools. An example of one that I would distrust is one that proclaims on billboards asserts that "XYZ University teaches traditional values". Big deal! A traditional household can teach those, too. A good college teaches one why some traditions need be protected and what traditions deserve challenge. A graduate of such a school is likely to take the sort of job that he had before going to college, but know a few more Bible verses to state. Also included are diploma mills. Default rates are high.
6. Community (commuter) colleges. Probably the ultimate bargain so long as one gets the courses that one needs. I am satisfied that so long as one gets the courses to be a machinist, one can become a machinist (really, a good job). I am satisfied that most who attend a four-year college would be better off financially by taking their lower-division coursework in these schools. They can teach the low-level college course that most professors don't relish teaching (English composition, calculus, and most survey courses required at four-year colleges. Nobody really cares where one spent one's first two years of college if one gets the degree). Low costs keep default rates low.
7. Overrated technical schools -- places that charge what the Federal student loan program will offer. Not to be confused with CalTech or MIT, these places have nothing to offer but a limited prospect for a job. The Obama Administration has been cutting off funds for such places -- like Corinthian Colleges. Junk schools deserve to go under.
RE: Business Failures - pbrower2a - 10-03-2016
Deutsche Bank, which had much exposure in the American lending crisis... and others (like the Greek financial meltdown).
What is the European Union’s wealthiest and most powerful nation to do when it risks running afoul of the rules it has spent years enforcing on other countries?
We may soon find out when Germany acts to shore up Deutsche Bank, a financial colossus teetering on the brink of collapse.
The government is likely to try to thread the needle with an unofficial bailout that allows Germany to claim it is still obeying post-financial crisis rules forbidding such measures, according to Mark Blyth, a political science professor at Brown University who specializes in international finance.
“The Germans know the rules aren’t working and that they are backwards, but they are kind of in a bind with their own voters,” Blyth said. “When you have basically said that all debts will be paid and insist on your European partners paying debts, and then you bail out your own bank, that looks like a huge inconsistency ― which it is.”
As a result, the “smart money,” Blyth said, is on the German government helping facilitate a takeover of Deutsche Bank by its smaller competitor, Commerzbank. In that scenario, the government would provide sweeteners and guarantees that would enable the acquisition to occur, but not a direct capital infusion or partial nationalization of the bank.
Deutsche Bank is in trouble following the U.S. Department of Justice’s announcement earlier this month that it is asking Germany’s flagship bank for $14 billion to settle an investigation into its sale of mortgage-backed securities leading up to the 2008 financial crisis. The bank is likely to negotiate a lower sum, but it now faces a crisis of confidence from investors that jeopardizes its existence.
That poses a quandary for German leaders. They must prevent Deutsche Bank from failing for the sake of the country’s economy, but cannot be seen by the public to be rewarding banks’ bad behavior ― or viewed by other countries as violating the rules Germany has so strictly enforced.
Germany, the de facto leader of the EU, has gone to great lengths to police other countries’ efforts to rescue their institutions. German Chancellor Angela Merkel warned Italian Prime Minister Matteo Renzi against bailing out Italy’s foundering banks over the summer.
Italy is a recent case study, but the successive onerous bailouts Germany has imposed on Greece exemplify the costs of Germany’s high-minded narrative about its own behavior. The EU, led by Germany, first bailed out Greece’s government in 2010 largely in order to save German banks like Deutsche Bank, which were overexposed to Greek debt. Most of the money Greek citizens have been forced to repay through several rounds of public spending cuts and tax hikes has gone to financial institutions ― whether foreign or domestic.
But by structuring the first bailout as an emergency loan to the Greek government rather than for its own banks, German authorities convinced their public that they had given undeserved charity to the lazy, spendthrift Greeks. That has primed Germans to back ever harsher austerity measures, which have plunged Greece into a prolonged economic depression with no end in sight.
Blyth anticipates that a non-bailout might have the added benefit of relaxing Germany’s official stance toward an Italian bank rescue ― effectively providing a “green light” for extraordinary action by the Mediterranean country’s government.
But don’t expect it to change Germany’s posture toward Greece. The EU’s powerhouse approved the latest tranche of loans to Greece, but has failed to commit to restructuring Greece’s debts, which economists agree the small country will never be able to pay.
http://www.huffingtonpost.com/entry/german-bailout-greece_us_57ed86ede4b0c2407cdcf31b?section=§ion=us_world
RE: Business Failures - pbrower2a - 10-04-2016
How long can QE work?
Free money to lenders from central banks have made personal thrift irrelevant as a source of capital. Debt has become more profitable to lenders than thrift. QE saved the banks, but it has also promoted subprime lending. It has also encouraged employers to underpay workers so that workers can be deeply in debt and thus more under employers' thumbs.
All that is missing is the Company Store.
RE: Business Failures - pbrower2a - 10-08-2016
I've got a little list... they never would be missed:
Quote:Authorities in the western Indian city of Thane said they were investigating another 630 people suspected of being involved in the extortion scam.
Workers at nine call centers allegedly impersonated IRS agents during calls to the U.S., according to local police commissioner Param Bir Singh. The victims were told they owed back taxes and would risk arrest if they hung up.
Singh told CNN the call center workers had been trained to speak with an American accent.
The call centers were making $150,000 a day for up to a year before being discovered. Money would be transferred by victims of the scheme to U.S. bank accounts before being sent to India.
Singh said the police had a mole inside the organization before the arrests were made, but he said the call center owners had escaped. He suspects that the fraudsters had accomplices in the U.S., but he has not yet made contact with American law enforcement officials.
The mechanics of the operation appear very similar to those of an IRS impersonation scam that U.S. authorities say swindled victims out of more than $15 million between 2013 and 2015.
In that case, investigators suspected the bogus calls were coming from India. The culprits stole identities to make it appear they were IRS agents in Washington.
"They have information that only the Internal Revenue Service would know about you," Timothy Camus, deputy inspector general for investigations with the Treasury Department, told CNN last year. "It's a byproduct of today's society. There's so much information available on individuals."
More recently, Treasury Department investigators filed criminal complaints in the U.S. against five individuals in three states, accusing them of fleecing nearly $2 million from more than 1,500 victims as part of a scheme to impersonate IRS agents.
http://money.cnn.com/2016/10/06/news/india-irs-scam-arrests/index.html?iid=surge-story-summary
...I understand that India's prisons are quite unpleasant.
RE: Business Failures - Ragnarök_62 - 10-08-2016
(10-04-2016, 10:14 AM)pbrower2a Wrote: How long can QE work?
Free money to lenders from central banks have made personal thrift irrelevant as a source of capital. Debt has become more profitable to lenders than thrift. QE saved the banks, but it has also promoted subprime lending. It has also encouraged employers to underpay workers so that workers can be deeply in debt and thus more under employers' thumbs.
All that is missing is the Company Store.
and
X_4AD_8 Wrote:QE is killing the banks.
Eric thinks QE is awesome.
Rags thinks QE is stupid.
RE: Business Failures - Ragnarök_62 - 10-10-2016
(10-10-2016, 12:37 PM)X_4AD_84 Wrote: nst the scammers. I've seen versions with both these fake "IRS" clowns as well as the fake "Microsoft" clowns. Some of them are very creative. Of course, the perpetual 13 year old in me likes the ones where, after stringing along the scammer for a half hour, one of those emergency aerosol can air horns gets placed right next to the phone mic and blasted.
My inner child strings M$ "support" by stringing them along with my Linux box. They ask me to run some Windows app to share my desktop. Since there is no such animal in Linux, I ask them where it is on my Unbuntu desktop.
Like this.
Them: go to the start menu.
Me: Uhhhh.... where is the start menu?
Them: click on the bottom right of the monitor.
Me: Uhhhhhh.... I clicked, but nothing happened.
Them: <getting a bit annoyed> What's on your monitor.
Me: Firefox icon, Unbuntu application menu, Linux update icon, and Xterm.
Them: We'll have to disconnect you from the internet if you can't share the desktop.
Me: You can't because I'm running Linux
Them: We're going to disconnect you from the internet.
Me: Fuck you, go ahead and disconnect away.
Them: <click>
I toss the IRS folks a SSN of 666-01-0203
![[Image: feeling-evil-smiley-emoticon.png]](http://www.sherv.net/cm/emoticons/yellow-face/feeling-evil-smiley-emoticon.png)
RE: Business Failures - pbrower2a - 10-10-2016
(10-10-2016, 12:37 PM)X_4AD_84 Wrote:(10-08-2016, 08:25 PM)pbrower2a Wrote: I've got a little list... they never would be missed:YouTube has many clips showing people doing psychological warfare against the scammers. I've seen versions with both these fake "IRS" clowns as well as the fake "Microsoft" clowns. Some of them are very creative. Of course, the perpetual 13 year old in me likes the ones where, after stringing along the scammer for a half hour, one of those emergency aerosol can air horns gets placed right next to the phone mic and blasted.
I got one troublesome scammer who told me that my computer was blocked, and I told him that
Russian prisons are horrible
Chinese prisons are horrible
Vietnamese prisons are horrible
Ukrainian prisons are horrible
Indian prisons are horrible
Nigerian prisons are horrible
I patched one of those fake IRS scammers to the real IRS so that the genuine IRS might get a chance to audit those creeps.
RE: Business Failures - pbrower2a - 01-15-2017
Ringling Bros. and Barnum & Bailey circus announced on Saturday night that after 146 years of performances, it was folding its big tent forever.
In a statement on the company’s website, Kenneth Feld, the chief executive of Feld Entertainment, the producer of Ringling, said the circus would hold its final performances in May. He cited declining ticket sales, which dropped even more drastically after elephants were phased out from the shows last year.
“This, coupled with high operating costs, made the circus an unsustainable business for the company,” the statement said. “The circus and its people have continually been a source of inspiration and joy to my family and me.”
Stephen Payne, a spokesman for Feld Entertainment, said in an interview on Saturday night that the closing would affect about 400 cast and crew members.
“We looked at the performance in 2016 and advance tickets sales in 2017, and we decided it was not a viable business model,” he said.
https://www.nytimes.com/2017/01/14/us/ringling-bros-and-barnum-bailey-circus-closing-may.html?utm_source=huffingtonpost.com&utm_medium=referral&utm_campaign=pubexchange&_r=0
RE: Business Failures - pbrower2a - 01-15-2017
As the Obama years come to a close I notice far fewer business failures than under Dubya -- even before the economic meltdown of 2007-2009. The best known of American circuses closes after nearly a century and a half the revenues can no longer keep pace with costs. The demise came apparently with the great cost of keeping the one land animal that may be smarter than humans... those were the top animal stars. But that reflects a cultural trend long in the making. Kenneth Feld rescued the failing circus business
The highest-profile business failures under President Obama were the questionable vocational schools more adept at getting students to sign notes that the federal government would guarantee the 'educational institution' which ordinarily prepared the student for nothing. The Obama Administration cut off the loans, so students get stuck with having to go to legitimate schools that really teach something or having to vocational schools of modest cost and promise.
Count on this: the Trump Administration want those scam schools back in business.
I expect this thread to get very busy in the next four years. Easy money for shysters is the Trump way.
RE: Business Failures - pbrower2a - 05-05-2017
Puerto Rico
Quote:With its creditors at its heels and its coffers depleted, Puerto Rico sought what is essentially bankruptcy relief in federal court on Wednesday, the first time in history that an American state or territory had taken the extraordinary measure.
The action sent Puerto Rico, whose approximately $123 billion in debt and pension obligations far exceeds the $18 billion bankruptcy filed by Detroit in 2013, to uncharted ground.
While the court proceedings could eventually make the island solvent for the first time in decades, the more immediate repercussions will likely be grim: Government workers will forgo pension money, public health and infrastructure projects will go wanting, and the “brain drain” the island has been suffering as professionals move to the mainland could intensify.
Puerto Rico is “unable to provide its citizens effective services” because of the crushing weight of its debt, according to a filing on Wednesday by the federal board that has supervised the island’s financial affairs since last year.
https://www.nytimes.com/2017/05/03/business/dealbook/puerto-rico-debt.html?_r=0
This will have political ramifications far beyond Puerto Rico.
RE: Business Failures - pbrower2a - 09-19-2017
Quote:One of the biggest names in brick-and-mortar retail has filed for bankruptcy protection.
Toys R Us, which has some 1,600 Toys R Us and Babies R Us stores around the world, filed for Chapter 11 in a Virginia court late Monday over $5 billion in long-term debt. The company said the debt had prevented it from investing to compete in what it called “an increasingly challenging and rapidly changing retail marketplace worldwide.”
Toys R Us plans to continue to honor gift cards, rewards points, warranties and return policies. It also said all of its stores would operate “as usual.” However, that may not last.
Underperforming stores will close, The Wall Street Journal reported, and those that remain open may be reconfigured to include “experience-based” elements such as play areas.
There was no word yet on how the moves would affect the company’s nearly 65,000 employees.
http://www.huffingtonpost.com/entry/toys-r-us-bankruptcy_us_59c0a8a4e4b087fdf50789a6?ncid=inblnkushpmg00000009
Demographics may be killing the toy business -- fewer children. Toys that used to be expensive are cheap, especially if they have electronic bases. The business is ferociously competitive, as shown by prior bankruptcies of Kay Bee Toys.
I'm also guessing that children are no longer showing as much attention to 'status symbols'. It is also telling that Toys 'R' Us goes out of business about as the last Millennial kids are in the toy 'market'.
RE: Business Failures - Warren Dew - 09-19-2017
(09-19-2017, 12:27 PM)pbrower2a Wrote:Quote:One of the biggest names in brick-and-mortar retail has filed for bankruptcy protection.
Toys R Us, which has some 1,600 Toys R Us and Babies R Us stores around the world, filed for Chapter 11 in a Virginia court late Monday over $5 billion in long-term debt. The company said the debt had prevented it from investing to compete in what it called “an increasingly challenging and rapidly changing retail marketplace worldwide.”
Toys R Us plans to continue to honor gift cards, rewards points, warranties and return policies. It also said all of its stores would operate “as usual.” However, that may not last.
Underperforming stores will close, The Wall Street Journal reported, and those that remain open may be reconfigured to include “experience-based” elements such as play areas.
There was no word yet on how the moves would affect the company’s nearly 65,000 employees.
http://www.huffingtonpost.com/entry/toys-r-us-bankruptcy_us_59c0a8a4e4b087fdf50789a6?ncid=inblnkushpmg00000009
Demographics may be killing the toy business -- fewer children. Toys that used to be expensive are cheap, especially if they have electronic bases. The business is ferociously competitive, as shown by prior bankruptcies of Kay Bee Toys.
I'm also guessing that children are no longer showing as much attention to 'status symbols'. It is also telling that Toys 'R' Us goes out of business about as the last Millennial kids are in the toy 'market'.
This is a restructuring, not a liquidation. The store will stay around.
I think it's more of a competitive market driving a poor competitor out of business than a sign of industry decline. The shopping experience at Toys'R'Us is fine for the kids, but terrible for the parents: the store arrangements seem like they are specifically designed to make parents lose track of their kids if they let them get more than about 20 feet away. Contrast that with the Lego Store, which is not only arranged with good sight lines for keeping track of kids, but also has a minder at the front of the store to prevent kids from escaping.
I'm happy to take the kids to the Lego Store or even the Barnes & Noble toy section, but if we're going to Toys'R'Us, I generally require them to know exactly what they are buying, and to agree not to browse, so as to minimize the chances of getting separated.
RE: Business Failures - pbrower2a - 09-19-2017
(09-19-2017, 02:14 PM)Warren Dew Wrote:(09-19-2017, 12:27 PM)pbrower2a Wrote:Quote:One of the biggest names in brick-and-mortar retail has filed for bankruptcy protection.
Toys R Us, which has some 1,600 Toys R Us and Babies R Us stores around the world, filed for Chapter 11 in a Virginia court late Monday over $5 billion in long-term debt. The company said the debt had prevented it from investing to compete in what it called “an increasingly challenging and rapidly changing retail marketplace worldwide.”
Toys R Us plans to continue to honor gift cards, rewards points, warranties and return policies. It also said all of its stores would operate “as usual.” However, that may not last.
Underperforming stores will close, The Wall Street Journal reported, and those that remain open may be reconfigured to include “experience-based” elements such as play areas.
There was no word yet on how the moves would affect the company’s nearly 65,000 employees.
http://www.huffingtonpost.com/entry/toys-r-us-bankruptcy_us_59c0a8a4e4b087fdf50789a6?ncid=inblnkushpmg00000009
Demographics may be killing the toy business -- fewer children. Toys that used to be expensive are cheap, especially if they have electronic bases. The business is ferociously competitive, as shown by prior bankruptcies of Kay Bee Toys.
I'm also guessing that children are no longer showing as much attention to 'status symbols'. It is also telling that Toys 'R' Us goes out of business about as the last Millennial kids are in the toy 'market'.
This is a restructuring, not a liquidation. The store will stay around.
I think it's more of a competitive market driving a poor competitor out of business than a sign of industry decline. The shopping experience at Toys'R'Us is fine for the kids, but terrible for the parents: the store arrangements seem like they are specifically designed to make parents lose track of their kids if they let them get more than about 20 feet away. Contrast that with the Lego Store, which is not only arranged with good sight lines for keeping track of kids, but also has a minder at the front of the store to prevent kids from escaping.
I'm happy to take the kids to the Lego Store or even the Barnes & Noble toy section, but if we're going to Toys'R'Us, I generally require them to know exactly what they are buying, and to agree not to browse, so as to minimize the chances of getting separated.
I haven't been in a Toys 'R' Us store for years. I don't like to plug commercial products of any kind, but at least one can make something out of the Lego blocks and use some imagination, and maybe learn a little about geometry. Toys 'R' us largely sells packaged toys with only one obvious use. Parents are generally getting wiser about such toys being of limited value as playthings.
Toys 'R' Us is an older business model which has not changed to adapt to the realities of the parent-and-child relationship. If you are not going to let your children browse, then for them to look at all the wares they will have to take you along... and you will get bored very fast. You will want to leave.
A basic secret of retailing is to get people to spend as much time as possible in the store before they leave. Stoke their curiosity, and let people get add-ons because they see an impulse purchase worth spending a small amount on.
Obsolete business models have a way of dying at a certain point. Tradition is not a selling point in retail.
RE: Business Failures - Warren Dew - 09-19-2017
(09-19-2017, 03:11 PM)pbrower2a Wrote:(09-19-2017, 02:14 PM)Warren Dew Wrote: This is a restructuring, not a liquidation. The store will stay around.
I think it's more of a competitive market driving a poor competitor out of business than a sign of industry decline. The shopping experience at Toys'R'Us is fine for the kids, but terrible for the parents: the store arrangements seem like they are specifically designed to make parents lose track of their kids if they let them get more than about 20 feet away. Contrast that with the Lego Store, which is not only arranged with good sight lines for keeping track of kids, but also has a minder at the front of the store to prevent kids from escaping.
I'm happy to take the kids to the Lego Store or even the Barnes & Noble toy section, but if we're going to Toys'R'Us, I generally require them to know exactly what they are buying, and to agree not to browse, so as to minimize the chances of getting separated.
I haven't been in a Toys 'R' Us store for years. I don't like to plug commercial products of any kind, but at least one can make something out of the Lego blocks and use some imagination, and maybe learn a little about geometry. Toys 'R' us largely sells packaged toys with only one obvious use. Parents are generally getting wiser about such toys being of limited value as playthings.
Toys 'R' Us is an older business model which has not changed to adapt to the realities of the parent-and-child relationship. If you are not going to let your children browse, then for them to look at all the wares they will have to take you along... and you will get bored very fast. You will want to leave.
A basic secret of retailing is to get people to spend as much time as possible in the store before they leave. Stoke their curiosity, and let people get add-ons because they see an impulse purchase worth spending a small amount on.
Obsolete business models have a way of dying at a certain point. Tradition is not a selling point in retail.
My kids are 5, 7, and 9, so they're at a prime toy buying age. We have a practice which may be unusual: we give them money for doing workbook pages, and they buy their own toys, except for birthdays and Christmas. That means they get to choose their own toys.
Toys'R'Us is the favorite toy store of one or two of them. It has Lego, but it also has lots of other things. The problem is the arrangement. They'd love to browse, and I wouldn't mind spending more time there if I could look at toys instead of watching the kids, but the arrangement is such that I have to watch the kids like a hawk or they will get separated and it will be almost impossible to get them back together. It's unfriendly to parents rather than unfriendly to kids.
I suppose it would be fine if modern society allowed kids to go to the toy store by themselves, but that's frowned on now. It's also fine for adults shopping without their kids, but as you say, Toys'R'Us tends to carry cheap stuff, so if a parent comes in for one toy, they're not going to spend much.
Incidentally, the 9 year old buys inexpensive solid plastic toys, and has a whole neighborhood in her bedroom. Meanwhile, Legos now come in preset kits, so they involve less imagination than before. I've sometimes bought lots of loose legos for castle building, but that's still a bit expensive. Ultimately, the toys are what the kids make of them, though.
RE: Business Failures - pbrower2a - 09-19-2017
"Restructuring and not liquidation"... euphemism. All businesses on the brink of death are obliged to change their model, reduce their number of outlets, drop loss-leader lines, and lay off a big number of employees. Of course it takes time to determine whether the 'restructuring' will work. Most likely, companies try to renegotiate leases and put off maintenance.
Few businesses successfully change their methods of operation when they go into decline -- successfully. Retailing is more obvious because we all encounter it. Montgomery-Ward tried to separate itself into separate categories within store spaces on the assumption that divisions within the firm would better handle such disparate objects as clothing and consumer electronics (when consumer electronics were expensive and profitable). It didn't work. It may have been the wrong approach -- or it might have been too late Dropping the "Montgomery" part of the name may have caused people to forget that there was a once-familiar Montgomery-Ward.
Toys 'R' Us does not really compete with Barnes and Noble or with Lego stores. It competes with Target, Wal*Mart, K-Mart, Meijer (in the Midwest), and even such entities as Dollar General, Family Dollar, Big Lots, and Five Below. The latter four?
Go to Big Lots
Leave dejected!
See what Wal*Mart
Has rejected!
Retailing is not an appealing career to well-educated people who see it at best as the sort of industry in which to get a couple of years in and prove a work ethic before going on to something more lucrative. Bringing in talent to shake things up is fiendishly expensive.
RE: Business Failures - pbrower2a - 09-19-2017
Who is the Big A?
RE: Business Failures - Warren Dew - 09-19-2017
(09-19-2017, 04:44 PM)pbrower2a Wrote: "Restructuring and not liquidation"... euphemism. All businesses on the brink of death are obliged to change their model, reduce their number of outlets, drop loss-leader lines, and lay off a big number of employees. Of course it takes time to determine whether the 'restructuring' will work. Most likely, companies try to renegotiate leases and put off maintenance.
Most airlines have gone through chapter 11 restructuring at some point in the decades since deregulation. Some did eventually liquidate and many got acquired, but a significant proportion are still around.