For the first time in 70 years, Toys “R” Us won’t be a destination for holiday shoppers. After a long and unsuccessful battle trying to fend off e-commerce behemoths, the retailer filed for bankruptcy protection in late 2017. In March 2018, Toys “R” Us began its liquidation sales across the country.
When it filed for bankruptcy, Toys “R” Us ceased operations and eliminated 30,000 jobs across some 800 stores, according to Challenger, Gray & Christmas, an outplacement firm in Chicago. An additional 1,100 jobs were cut at the company’s headquarters in Wayne, N.J.
‘The Toys ‘R’ Us name has been basically destroyed’
While consumers have lamented the loss of Toys “R” Us, billionaire toymaker Isaac Larian is downright bitter.
Larian, the founder and CEO of the world’s largest private toy company, MGA Entertainment, had submitted a $675 million bid for Toys “R” Us stores in the U.S. on April 13. After failing to reach an agreement, Larian offered a separate $215 million offer for 82 Canadian stores, which was also rejected. MGA Entertainment makes toys like Bratz dolls and Little Tikes.
“The Toys ‘R’ us name has basically been destroyed and has zero value now … You can come up with another store tomorrow and call it ‘Toys Were Us’ or ‘Toybox’ or whatever and just build on it,” he told Yahoo Finance in an interview.
Still, he acknowledges the gaping hole that the famed toy store left behind.
Retailers are desperately trying to recoup losses from Toys “R” Us. Walmart (WMT) ramped up toy offerings by 30% in stores and 40% online, even debuting a ‘digital playground’ for kids to interact with toys on the web. Target (TGT) added a quarter million square feet of space solely dedicated to toys across 500 Target Stores earlier this month, offering more than 2,500 new and exclusive toys this year. Amazon (AMZN) released its first toy catalog, so as not to be outdone by its brick-and-mortar counterparts.
“I don’t think frankly anybody is going to be able to cover what Toys ‘R’ Us lost … Other retailers are not going to keep the inventory. I think Amazon and Target are going to really get a lion’s share of that business because they’re poised to do so, but overall, I don’t think anybody’s going to recover from Toys ‘R’ Us’ loss,” said Larian.
The landscape for retail: holiday hiring a bright spot
Toys “R” Us is far from the only casualty in the retail apocalypse. Sixteen retailers, including Sears, David’s Bridal, Nine West, Brookstone, Claire’s, Mattress Firm and Bon-Ton, have filed for bankruptcy in 2018 alone.
Amid these closures and their subsequent layoffs, Challenger has tracked 714,000 holiday hiring announcements, the highest number since the firm began tracking announcements in 2012. Traditional retailers have been responsible for 427,000 of those positions. Meanwhile, Amazon slowed down holiday hiring for the first time in six years.
“Like many industries this year, retail is responding to changing consumer demands and the implementation of new technologies that are disrupting how, where, and when consumers purchase goods and services,” said Andrew Challenger, vice president at Challenger, Gray & Christmas.
“As a major industry, employing tens of thousands across the country, the potential loss of jobs will be significant. However, the new technologies implemented during this period across the industry could lead to an influx of jobs that require a higher level of skills, meaning those positions may demand higher wages and better benefits,” he added.
Melody Hahm is a senior writer at Yahoo Finance, covering entrepreneurship, technology, and real estate. Follow her on Twitter @melodyhahm.
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