Essay Toys R Us

Toys R Us Sold Essay

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Toys R Us is the world's largest children's specialty retailer. The company operates toy stores throughout the world and is publicly traded on the New York Stock Exchange. In this paper I will give a brief company history, cite where the competitive environment is coming from, strategies that were attempted, and where they stand today.
Toys R Us founder Charles Lazarus opened the first Toys R Us store in Rockville in 1957. The company went public in 1978 and evolved into a powerful international toy vendor, with Kids R Us, Babies R Us and Toyrus.com. It operated 638 stores in the United States and 579 outside the country.
     Although Toys R Us participates in the Specialty Retail industry, it has identified its…show more content…

The 1990s, however, have been characterized by increased competition and an erosion of the company's market share. This has been reflected in the stock's performance, which has been lackluster during the early and mid-1990s. Toys R Us began to struggle with fierce competition. The discounters had made it a price game which Toys R Us could not compete in. Other large toy chains have suffered even more. FAO Schwartz Inc. and KB Toys Inc. have filed for Chapter 11 bankruptcy protection, both citing competition from discounters. Toys R US came to the realization that it may have to sell off its toy business.
Before small toy retailers feared Wal-Mart, Toys R Us used low prices and wide selection to wipe out hundreds of specialty stores throughout the 1960s and 1970s. Now competition from discounters Wal-Mart and Target Corp. has left Toys R Us struggling for profit and searching for ways to cut costs. The chain's profits began to fall and sales have remained flat.
Toys R Us' financial troubles are not new. As part of a broad reorganization, the Wayne, N.J. company, who at one time was the nation's second-biggest toy retailer, decided to close their Kids R Us stores and sell of its Imaginarium stores, which sell educational products and be left with Toys R Us and Babies R Us. By doing this Toys R Us has planned that over the next year it would reduce operating expenses and cut capital spending. In addition, it planned to mark down prices

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In a statement on Monday night, Toys “R” Us said the filing would help the company invest in long-term growth and “fuel its aspirations to bring play to kids everywhere and be a best friend to parents.”

Toys “R” Us joins a wave of retail bankruptcies this year, including the children’s clothing retailer Gymboree, Payless ShoeSource and rue21, which sells clothing for teenagers. Other retailers have closed thousands of stores and laid off tens of thousand of workers as they try to cut costs and compete with e-commerce.

The company said its roughly 1,600 Toys “R” Us and Babies “R” Us stores around the world, including in Australia, Asia and North America, would continue to operate “as usual.”

JPMorgan Chase and a group of other lenders have agreed to provide the company $3 billion in financing to help Toys “R” Us continue paying suppliers and employees.

“Today marks the dawn of a new era at Toys “R” Us, where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way,” Dave Brandon, the company’s chairman and chief executive, said in a statement.

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