After a few attempts to crowdfund a path to financial solvency, several months of ‘will they won’t they’ drama with potential buyers, and more than a handful of everything must go sales, Toys ‘R’ Us will finally close the doors to all US locations. This is one of the final legs of a liquidation process that has been going on since the company filed for Chapter 11 bankruptcy last year.
This is truly the end of an era, as the massive toy chain spent decades as an iconic institution of the American childhood. Despite holding on for upwards of 60-years, Toys ‘R’ Us ultimately found that it was just too hard to compete with the burgeoning online toy market and decided to close shop. In fact, it was the effort to compete that ultimately sealed the deal for the company. After a buyout in 2005, Toys ‘R’ Us was saddled with $5 million worth of debt.
While, the era of buying anything, let alone toys, in a physical location is slowly ending, there were a few attempts and outside offers to buy the company and all of its assets. Isaac Larian, the CEO of MGA Entertainment Inc, offered to buy the company for $900 million, but Toys ‘R’ Us elected to pass on the offer rather than have to have the brand continue to struggle with competing in the physical marketplace. This offer came after Larin’s attempt to raise $200 million of the $900 million alone and then crowdsource the rest of the money failed spectacularly, as Larin was unable to crowd fund even $1 million.
With the company now on it’s way out, those who work in toy retail like Larin are concerned that a vacuum that will be created in the wake of Toys ‘R’ Us’ absence, which could cause certain toy manufacturers to merge together. A potential Mattel, Pawtucket, and Hasbro merger has been on the table for some time already. Beyond that, retailers that have historically spent less on toys will probably up their effort to get in on a newly spacious market.