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The rise and fall of Toys R Us

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  1. #11

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    Quote Originally Posted by pin:
    I have a $100 voucher there. Any news on if the HK store is shutting?
    Diff ownership structure with Li & Fung involved in TRU Asia.

    A lot of their problems stem from suppliers cutting off their credit lines once it was announced they had some problems (before xmas). Could happen here.. Go spend it on diapers or something...

  2. #12

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    Good news for my brothers.... they own Toys business in UK.
    Bad news for 100s of people losing jobs.


  3. #13

    I don't think so. I heard they are open for business as usual in Asia. Customer programs to continue as normal.

    Last edited by SmileAlways; 21-03-2018 at 02:43 PM.

  4. #14
    Quote Originally Posted by pin:
    I have a $100 voucher there. Any news on if the HK store is shutting?
    I heard they are not part of the US process. Should be fine..... no worry.....

  5. #15

  6. #16

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    More fuckery ... someone should just put them out of their misery and sell to Amazon.

    Toys "R" Us is planning to liquidate after failing to restructure in bankruptcy, weighed down by too much debt that it took on in a private-equity leveraged buyout in 2005. But this guy has a plan:

    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.

    It is a literal GoFundMe campaign. Here is the website. At Barron's, Mary Childs explains the rewards:

    If you give up to $999, you get MGA's Little Tikes® Cozy Coupe®, and up to $4,999, a T-shirt saying “I’ll ALWAYS be a Toys ‘R’ Us Kid” and a "Little Tikes® Build-a-House." Invitations to the "reopening block party" start at $10,000, and $25,000 gets you a tour of the Ohio Little Tikes® factory—"the oldest toy factory currently operating in the U.S.—including travel and accommodations." ...

    The #SaveToysRUs GoFundMe campaign states clearly for potential funders that this is neither a tax-deductible charitable donation nor an actual investment where you retain economic interest: You do not get any equity or stake in any acquisition. You are simply overpaying for an inflatable bouncy free-throw-lane-with-wrestling-ring-sides Little Tikes® Super Slam ‘n Dunk, a product sold by Larian's MGA, to help revive a childhood institution.

    Ah.

    There seems to be a widespread consensus that financial engineering killed Toys "R" Us: A private-equity buyout fueled by easy access to junk bonds loaded the company down with too much debt, which made it impossible for it to invest in improving its business. But Larian's core idea is that a different kind of financial engineering could save Toys "R" Us: He can do a new buyout funded by new investors, but instead of giving them a high junk-bond coupon, or even equity, he will give them factory tours and T-shirts.

    I ... look, it's just a website. It doesn't seem particularly serious. As of 9:30 a.m. today it had $200,047,609 of pledges, but that number is misleading; the first $200 million comes from Larian and his investors, who will all presumably be actual investors with an economic interest in the bid, while the last $47,609 comes from GoFundMe contributors who will get stickers or parties or whatever.
    Still it has tapped into a certain cultural moment. GoFundMe is a thing. Kickstarter is a thing. Initial coin offerings -- where you invest in an enterprise owned by others in exchange, not for ownership or repayment, but for "tokens" with no contractual rights -- are so intensely a thing. Novelty-flamethrower-based funding is, more or less, a thing.

    The private-equity buyout of Toys "R" Us is a late consequence of an intellectual revolution that began in the 1970s and 1980s, when Michael Milken pioneered high-yield bonds and leveraged buyouts by understanding -- and by convincing investors of -- the counterintuitive fact that lending money to companies that might not be able to pay it back could be even more lucrative than lending money to companies that could definitely pay it back.

    But if there's a GoFundMe rescue of Toys "R" Us -- and, to be fair, there obviously won't be, come on -- then it will be part of the early stages of a new intellectual revolution that is happening all around us. This one is considerably more counterintuitive than the junk-bond one; I, for instance, cannot understand it. The point seems to be, though, that giving money to people in exchange for no investor rights -- no equity, no promise of repayment, just a badge indicating that you are a participant in some nebulous community -- is even better than giving money to people in exchange for some rights. Sometimes "better" seems to mean "more lucrative" (certainly the people who invest in initial coin offerings for tokens that will give them no rights to products that have not been built seem to expect those tokens to be wildly valuable), and sometimes it doesn't (what do the Toys "R" Us people expect?). In each case there's some expectation that what you get back, while it has no ownership rights, has some connection to the business; in an ICO you get back tokens that can be used on whatever platform the business is building, while in the Toys "R" Us GoFundMe you get, you know, toys. So there is an element of product pre-selling, but there is also often an element of speculation, and an element of emotional community-building, and an element of piling into viral internet enthusiasms, and probably some other elements that I do not understand.

  7. #17

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    Tears ‘R’ Us: The World’s Biggest Toy Store Didn’t Have to Die

    https://www.bloomberg.com/news/featu...-t-have-to-die


  8. #18

    Simple consumer behavior explains most of the company's demise, no? Kids (and thus parents) are now socialized into buying their toys online (e.g., Amazon) or Target/Walmart.

    shri likes this.

  9. #19

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    https://twitter.com/whattabxtch/stat...628531713?s=19

    Thread of tears Ok even I feel a bit sad reading it.

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