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Don't Throw Away Those Geoffrey Dollars Just Yet

Image via Reservoir Geeks

Almost everyone remembers trips to Toys "R" Us as a child or as a parent. The company, which was founded in 1957, was the go-to toy store for decades. As with countless brick-and-mortar retailers, Toys "R" Us couldn't overcome the retail apocalypse.

On September 18, 2017, Toys "R" Us filed for Chapter 11 bankruptcy protection. The company, which hadn't reported an annual profit since 2013, had $5 billion in long-term debt that cost $400 million per-year to service. While the rise of e-commerce certainly hurt Toys "R" Us, some believe the company's debt became too large following an acquisition by a group of private equity investors. Toys "R" Us failed to invest in its stores to compete with the likes of Amazon, Target and Walmart.

Within a year of filing for bankruptcy, Toys "R" Us liquidated its business and closed all of its U.S. stores, around 800 of them, after 70 years of operations. The death of Toys "R" Us, which accounted for 15% to 20% of U.S. toy sales, cost around 30,000 employees their jobs. Toys "R" Us was so important to the toy industry that news of its liquidation even sent shares of toy makers Mattel and Hasbro tumbling.

Tru Kids, the company that was created following the purchase of Toys "R" Us' intellectual property, isn't going to let the nostalgia fade. They are bringing Toys "R" Us back to life with its first new brick-and-mortar store. The store, which is opening as a smaller-format, will open in Paramus, NJ tomorrow with a second store opening in Houston, TX in early December. Tru Kids is planning to open 10 stores in the U.S. in 2020, with the possibility of a larger New York flagship store.

"We believe that Toys "R" Us was renowned, and customers really saw us as the experts in the space," said Richard Barry, president and CEO of Tru Kids. "And we want to make sure we deliver on that, but in a very different way than we were before, because this is a ... high-touch, experiential store."

Just last month through a partnership with Target, Toys "R" Us relaunched its website, redirecting customers to Target's website to complete the check out. "We spoke to a lot of different folks as we went through this process," Barry said. "What inspired me about Target was their investment in the category."

While it is yet to be determined if Toys "R" Us can be successful in its efforts to make a comeback, many people are likely rooting for the company's success on nostalgia alone. With Black Friday all the rage today and the shopping season in full gear, shoppers will once again be able to purchase the hottest toys at Toys "R" Us just as they have for decades.

Leftover Crumbs

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