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The Retail Apocalypse

narduch said:
So Toys R Us is calling it quits in the US & UK.

They say that the Canadian operations will survive. But you have to wonder how well it will do now.

They were another victim of predatory hedgefunds.
Click to expand...

Hard to imagine it surviving for long as a Canada-only entity. They'll be hard pressed to compete on pricing.
 
MGA Entertainment (maker of the Bratz dolls and owns the Little Tikes brand) is planning to purchase all of Toys R Us's profitable Canadian operations.

Some of the staff in the TRU head office in Passaic County, NJ would be transferred to Concord, ON.

Geoffrey the Giraffe just can't compete with Big Alexa.
 
Johnny Au said:
MGA Entertainment (maker of the Bratz dolls and owns the Little Tikes brand) is planning to purchase all of Toys R Us's profitable Canadian operations.

Some of the staff in the TRU head office in Passaic County, NJ would be transferred to Concord, ON.

Geoffrey the Giraffe just can't compete with Big Alexa.
Click to expand...


This will be interesting, right, because the company in the United States and United Kingdom and most likely, soon in Australia, Poland, rest of Europe and Asia will go out of business, so this would leave the stores here in Canada the last standing ones for however long they last.
 
Johnny Au said:
Geoffrey the Giraffe just can't compete with Big Alexa.
Click to expand...

Amazon isn't nearly as big a factor as the media likes to portray. Online sales in the USA are still only 10% of retail (see https://www.marketwatch.com/story/amazon-is-actually-the-weakest-of-the-big-us-retailers-2017-08-30 ). The number is about half that in Canada. I doubt Amazon dominates in selling toys. It's a difficult business, low margins, largely seasonal demand, and every year there are major inventory challenges (e.g. the hot new toy that every kid thinks they must have, but is back-ordered until next year, by which point nobody will care about it). Toys R Us would still be profitable had it not been sunk with the ridiculous debt load brought on by a leveraged buyout. The main reason for the chain's demise is that Bain Capital made a huge gamble and lost. But, just as with the implosion of Sears, "online online online amazon online not keeping up with the times not connecting with millennials" makes for a better story than "thousands of people out of work after management destroys solid business in failed gamble for even greater profits".

Of the external factors, Walmart would be a much bigger reason. Toys are extremely price-sensitive, and very low margin on the retail side. Ironically, Toys R Us put countless other toy retailers out of business when they brought the big-box model to the category. Calls for Toys R Us to offer a better shopping "experience" a la Starbucks to justify higher prices are ridiculous; toys is an area where people will drive 50 miles to your competitor if they can get the same item for $1 less. The general decline of the middle class is another, but of course nobody likes to talk about that when they see all these empty malls and bankrupt chains. It's much more comforting to think Amazon replaced them all, even though it's demonstrably untrue.
 
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Johnny Au said:
Here's an analysis of the Retail Apocalypse with an emphasis on everyone's favourite failing toy retailer: http://www.cbc.ca/news/business/retail-feature-1.4577670
Click to expand...

That's a good article. As we saw with Sears Canada, and more recently with Toys R Us, the media can be lazy and typically just grinds out "Oh no, Amazon" articles. In fact, the retail apocalypse is largely overblown, and while online sales has made retail even more cutthroat competitive, the reasons for chains failing are usually myriad, and many of those reasons are unrelated to Amazon.
 
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gabe said:
According to the baby boomer millennial hating Toys R Us executives, its all the millennials fault!

Toys R Us says millennials not having kids hurt the company

http://www.businessinsider.com/toys-r-us-closes-millennials-babies-birth-rate-2018-3
Click to expand...
Correlation does not necessarily imply causation, TRU!

Yes, many articles about TRU's decline often neglect to mention that TRU sells video games.

@Skeezix

See here: https://www.straight.com/life/10514...ition-when-west-broadway-toys-r-us-shuts-down
 
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