Published: Wed, March 21, 2018
Business | By Kate Woods

Toys R' Us and Babies R' Us close doors

Toys R' Us and Babies R' Us close doors

Via USA Today, the remaining Toys "R" Us stores will kick off the "going out of business sale" on Thursday, March 22.

Last week, Toys "R" Us announced it had begun the process of shuttering its 700-plus remaining USA stores, leaving a number of analysts and toymakers questioning the long-term fate of the industry.

Back in late January, the company announced plans to close just 170 Toys R Us and Babies R Us stores.

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In addition, NPD data shows that 70% of sales through Toys "R" Us were for an occasion like a birthday (23%) or Christmas (34%), and that almost 70% of toys purchased at Toys "R" Us were chosen because kids asked for that specific product or brand.

The rest of the company's creditors were part of the initial bankruptcy filing and their collateral is Toys' other assets. Most stores are slated to close by June, though select locations could shut down earlier based on inventory. The plan includes airport locations, global expansion and a new, smaller NY flagship.

KB Toys went out of business in 2009 and Toys R Us acquired the brand, according to CNBC.

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"We're going to save the toy industry", he wrote in a LinkedIn post. "The risk is that consumers load up on toys that have price reductions of 30 to 90% [i.e., from Toys R Us closeout sales] and stock them away until the holiday gift giving season".

Last week, CEO David Brandon told employees they planned to file liquidation papers and a hearing in bankruptcy court soon. As an ironic historical footnote, at the time of its first bankruptcy, the retailer was owned by Bain Capital, one of Toys R Us' private equity owners.

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