Toys ‘R’ Us Founder Passes Away, Just as Outside Investors “Come to the Rescue”
It has been an interesting couple of weeks for the iconic Toys ‘R’ Us brand. Just days ago the company announced it was calling it quits, today its founder passed away and, meanwhile, it appears the company might have a rescuer.
In a statement the company said:
“There have been many sad moments for Toys“R”Us in recent weeks, and none more heartbreaking than today’s news about the passing of our beloved founder, Charles Lazarus, after a period of declining health. He visited us in New Jersey just last year and we will forever be grateful for his positive energy, passion for the customer and love for children everywhere. Our thoughts and prayers are with Charles’ family and loved ones.” He was 94 years old.
Meanwhile, there is a third party interested in rescuing the soon to be defunct company. Bloomberg reports:
“The head of the company that created Bratz dolls and Little Tikes is putting $100 million toward a long-shot bid to save Toys ‘R’ Us.
“MGA Entertainment Inc. Chief Executive Officer Isaac Larian is aiming to buy the toy-store company’s assets as part of an investment group that includes a crowd-funding campaign. He said it’s his own money on the line, and MGA isn’t part of the bid. If he’s successful, the executive expects that 200 to 400 U.S. stores can be saved.
“’There is a lot of value in the Toys ‘R’ Us name, a lot of value in all the assets that they have,’ Larian said in an interview on Bloomberg Television. ‘If Toys ‘R’ Us is not here, I think the toy business as a whole will have a devastating year — this year and the following year.’
“Larian’s push to help the toy retailer survive liquidation includes a bid that a group of investors made for the Canadian assets of Toys ‘R’ Us last week. He and other investors also launched a campaign on GoFundMe for the purchase of U.S. assets from the company. Their goal is to raise $1 billion by Memorial Day.
“The bankruptcy and subsequent liquidation of Toys ‘R’ Us has bludgeoned toymakers (sic), which stand to lose a key distribution channel and platform to test new products. Mattel Inc.’s stock has lost about 47 percent of its value in the last 12 months, with Hasbro Inc. slipping more than 14 percent over the same period. MGA, based in Van Nuys, California, is privately held.”
This plan is a stretch, but many in the toy industry is seeing an existential crisis if this bastion of toy promotion fades away.
Kevin Price, Host of the nationally syndicated Price of Business show on the Biz Talk Radio Network and an editor with USABR, talked about the future of Toys ‘R’ Us in an interview with USA Daily Times. He said it was too early to say that the toy store was dead yet. In a conversation Price said, “I was not at all surprised by this and have suggested that this (the bankruptcy) was a possibility for a few years now. The company’s filings have been weak each quarter for quite some time now. Still, as a Baby Boomer who grew up on this iconic store, it is shocking to see it go out of business. It simply never figured out how to stay relevant with the rise of the Internet. However, I would not be surprised if it has a ‘reincarnation’ of sorts. Coming back in a more modest form, with smaller locations, and emphasizing unique products. It has an inventory it can work with and I think parents want their children to have tactical experiences with toys you cannot get online or at the limited selections at big box stores. Time will only tell.” With the statement by Larian, this prediction might be coming true.
