Business Failures

[pbrower2a]

(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...mg00000009

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.