The age of the iconic toy store is over. Toys R Us — the same company that absorbed former competitors like KB Toys, eToys.com, and F.A.O. Schwarz in 2009 after those brands faltered — announced last week it was shutting down after 70 years in business.
Toys R Us threw in the towel just six months after filing for bankruptcy and unveiling an ambitious strategy to introduce cutting-edge options like augmented reality into the shopping experience.
Toys R Us Down, More Could Follow
In court papers last fall, CEO David Brandon spelled out his vision. He wanted to transform Toys R Us stores from warehouses to “interactive spaces” where employees would “remove products from boxes to let kids play with the latest toys.”
Americans spent $20.7 billion on toys last year — and Toys R Us accounts for an estimated 15 to 20 percent of that.
But Toys R Us waited too long to embrace these potential inspiring experiences as it struggled under the weight of about $5 billion in debt.
Now more than 31,000 people are losing their jobs. What’s worse, many more job losses could follow unless toy suppliers find new outlets for the products they formerly sold to Toys R Us.
As Brandon noted in a speech to employees last week, “We have vendors and suppliers out there who are also going to experience disruption and in some cases the same risks of insolvency based on the level of penetration they have with our company.”
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