According to the Washington Post, Toys R Us is closing all 800 of its retail locations after more than 60 years of business. An insider source estimated total job loss to be 33,000.
The retailer was having trouble competing with online and big-box competitors. They filed for bankruptcy six months ago after being unable to make up $8 billion in debt that dated back to a 2005 buyout.
Earlier this week, several sources reported that the store had stopped paying its manufacturers, many of which were American companies.
On Wednesday, Toys R Us stated that it would close all of its UK stores, and in the United States, the closures would occur over an extended period of time.
A group of toymakers including Isaac Larian, CEO of MGA Entertainment, to which Toys R Us owes $21.3 million after filing for bankruptcy, pledges to keep at least some of the stores open. “There is no toy business without Toys R Us,” Larian told the Washington Post. “It’s a big deal and I’m going to try to salvage as much of it as possible.”
He has submitted a bid to buy 82 of Toys R Us’s Canadian stores, and up to 400 US retail locations.
Despite efforts to make its in-store experience more interactive, Toys R Us was unable to battle for customers’ attention, which is increasingly screen-oriented. The store had added hands-on “play labs” to many of its locations to allow children to interact with products while parents shop, but analysts said that the experience wasn’t enough to compete with boutique toy stores that also offer an immersive experience.
A May 2017 report in USA Today profiled Toys R Us’s attempt to finally tune into e-commerce – an attempt that the retailer itself admitted came too late. At that time, Toys R Us had just launched a new website, opening the portal to online purchases. “Some organizations recognize faster than others there are shifts in the ways customers want to be communicated with and the way customers want to purchase products,’’ said Toys R Us CEO David Brandon at the time. “It probably took us a while.”
Amazon, Walmart, and Target own an increasing size of the toy market. While the younger generation may not realize the source of their playthings, the loss of Toys R Us impacts many of their parents generation for whom the brand became an icon of American childhood.