From the top of the food chain to rock bottom was the fate of Toys R Us in March this year. What was once a favourite place for any child to visit with their parent quickly descended into a downward spiral. We all have some great memories of visiting the retail store as an infant with it being bustling with new toys and the staff were ever so friendly. In its later years, it failed to keep up with the rising increase in online retail sales with parents simply buying toys online and getting them delivered, which could have been the main reason for their failure.
It was only in September 2017 Toys R Us declared bankruptcy and a few months later they announced store closures and then by March 2018 they had liquidated into thin air. Obviously, this is very sad for those that grew up loving the Toys R Us brand and everything they believed in, but the question is, could it have been prevented?
The $6 billion debt will not have helped Toys R Us in their long-term strategies, but if they financed their assets better they could have cut this down. For example, delegating more tasks to colleagues and cutting down on the number of people that they employ. Also if they closed down a few stores when they first acquired this debt in 2005 they may have in the long term benefited by saving a lot of money!
Toys R Us could have potentially averted any danger of liquidation if they kept up with the rise of online retailers like Amazon and eBay however that would have taken the companies to value away. A visit to a Toys R Us store was the highlight of every child’s week and the same effect cannot be projected from ordering something off the internet, so you have to commend them to stick to their guns, however, it didn’t pay off in the end.
Toys R Us will forever remain a great memory in everyone’s life and although many are sad its reign has come to end, it really isn’t a surprise with today’s ever-evolving retail market. If only they kept up with the rising competition, then perhaps they would still be a genuine contender!
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