Title: Going Out of Business – Toys “R” Us | The Connectere
Headings: Going Out of Business – Toys “R” Us
Going Out of Business – Toys “R” Us
Leave a Reply
Cancel reply

Content: While Toys “R” Us, being a brick and mortar store, was still pulling $792 million annually in the 2000s, it wasn’t swift enough to compete with a giant like Amazon. When the company finally decided to revamp its website in 2016, its uphill battle was to catch up on 10 years of innovation. Consequently, the company struggled in the face of rising e-commerce popularity. In the liquidation filing, Toys “R” Us pushed the blame for its poor performance (which was low enough to prevent it from competing and making a profit) on Walmart and Amazon. Amazon and Walmart are not the only factors to blame for the sinking of Toys “R” Us. By the time the company filed for bankruptcy, it was drowning in debt. Therefore, the seeds for its collapse were sown way before, in 2005, when private equity firm Bain Capital along with two other firms purchased Toys “R” Us for $6 billion. They paid $1.2 billion out of their pocket while the rest was borrowed. It was Toys “R” Us that was held responsible for paying back the remaining $4.8 billion its investors owed. As a result, it was then called “an ATM machine for Wall Street”.