Toys & # 39; R & # 39; Us blames rivals for self-inflicted wounds



Toys & # 39; R & # 39; Us said on Thursday that he was giving up his fight to stay alive, and that he was killed by vendors who did not support the 70-year-old chain, by rivals whose predatory prices created a long chain of losses, and by the media focused on their travails. .

Chief Executive David Brandon marked a long list of suspects, including Target, Walmart and Amazon.

But it reveals the actions and inactions of the once powerful chain the retailer with long problems was not killed, committed suicide.

Perhaps the first self-inflicted wound occurred in 2000, when Toys & # 39; R & # 39; Us, struggling without a viable e-commerce platform, signed a 10-year contract to become the exclusive toy seller at Amazon.
At that time, buyers who went to toysrus.com would end up in Amazon.

The deal may have given Jeff Bezos' online giant an advantage in the toy business: an advantage he used to steal precious customers.

"That was a terrible deal for A & s' R & # 39; Us," said BMO badyst Gerrick Johnson. "They were badfed by Amazon and took advantage of them."

The move, which today would seem absolutely strange, occurred because Toys & # 39; R & # 39; R & # 39; Us "panicked," said a source in the toy industry who did not want to be identified.

"If they had not panicked, they could have gotten ahead of themselves and not caught up with e-commerce," the source said.

In 2004 Toys & # 39; R & # 39; Us, claiming that Amazon was selling other companies & # 39; toys, sued Amazon to finalize the deal.

The lawsuit was resolved in 2009, but at that time Toys & # 39; R & # 39; Us was sadly lagging behind in the online arms race.

Never reached, experts say.

"Their corporate culture never captured e-commerce," said toy industry consultant Richard Gottlieb. "They were never a threat to anyone online."

In another self-inflicted wound, Toys & # 39; R & # 39; Us never quite coincided with the lower prices of its rivals, Johnson said.

For example, a Hasbro Nerf Blaster that sold for $ 49.99 at Toys & # 39; R & # 39; Us at the end of last year sold for $ 39.97 at Walmart, $ 44.99 at Target and $ 34.26 at Amazon during the same period, according to BMO research.

Toys & # 39; R & # 39; Us also gets hurt by not making their stores a satisfactory place to buy. Stores were often described as dirty and were mentioned as a reason for customer traffic to fall in recent years.

"The customer experience in the store was bad," said Gottlieb. "This store-style supermarket worked well in the 1970s and 1980s, but not now."

Also, Toys & # 39; R & # 39; Us never became a destination for teenagers or players, despite offering consoles, video games and other technological toys. It largely cedes that business to Game Stop, Best Buy and other competitors.

"Teenagers would not go to a children-oriented store, so they never became a place for the adult player," Gottlieb added.

Be sure, the $ 5 billion debt stack, created when Bain Capital, KKR and Vornado bought the chain at an LBO of $ 6,600 million in 2005, did not help.

But that was also a self-inflicted wound. [19659002] With the almost certain disappearance of the chain, approximately 30,000 employees will lose their jobs, and many cities will be emptier as 730 US stores shut down.


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