U.S. Toys R Us is in a development dilemma

by:Ennas      2021-11-14
(Original title: Toys R Us in the United States is in a development dilemma)    Not long ago, the United States **** toy chain Toys R Us formally filed for bankruptcy protection and initiated bankruptcy liquidation procedures in the U.S. Bankruptcy Court in Virginia. Analysts believe that, in addition to the company's own asset structure, the incident reflects the huge impact of online retail on the traditional physical retail industry from one side.   Toys R Us chairman and CEO David Brandon admitted in the announcement that the company’s long-term debt that needs to be restructured totals more than 5 billion U.S. dollars. Toys R Us currently has 1,600 stores and more than 60,000 employees worldwide. In recent years, the company has been at a loss. In the first quarter of this year, its loss reached 164 million U.S. dollars.   However, filing for bankruptcy protection does not mean bankruptcy. Toys R Us hopes to obtain a certain amount of funds by applying for protection to help companies get out of the predicament. It is reported that before the company announced its application for bankruptcy protection, JP Morgan Chase and other consortia promised to provide more than $3 billion in funding to support its debt restructuring.   Since its founding in 1948, Toys R Us, headquartered in New Jersey, has been regarded by consumers as a place for innocence. The letter R in its English brand name is intentionally reversed to show that it is written by children. At its peak, Toys R Us was regarded as a category killer by the American retail industry, that is, it occupies an absolute dominant position in the subdivision of toys. In the 1990s, Toys R Us held a Star Wars series toy debut event at midnight, and the scene was as hot as the first spot of popular electronic products today. The Toys R Us global flagship store opened in Times Square in New York in 2001, covering an area of u200bu200b10,000 square meters, and even equipped with a Ferris wheel and giant mechanical Tyrannosaurus rex, once becoming a popular attraction in New York. Toys R Us was originally a listed company. In 2005, it was jointly acquired by private equity fund KKR, Bain Capital Corporation and Wernado Real Estate Investment Company for US$6.6 billion. Up to 400 million U.S. dollars. The analysis generally believes that the asset structure problem has restricted the investment of Toys R Us in the development of online sales and the improvement of user experience in recent years.  Retail industry experts believe that today's consumers walk into toy retail stores and seek not only toys, but also interactive shopping experiences. Amazon founder and CEO Bezos once pointed out that if toy stores want to survive in the era of online shopping, they must provide consumers with fun that cannot be provided by online retailers like Amazon. In recent years, some brick-and-mortar toy retailers smaller than Toys R Us have worked hard to improve their service capabilities and have adopted many methods such as training their employees in the field of children's development. In contrast, Toys R Us has not done enough to improve the shopping experience. Its stores give consumers the feeling that they are more close to warehouses, and the price is not advantageous.   At the same time, the plight of Toys R Us also reflects the reality that the traditional American retail market is constantly being swallowed by online competitors. In the new retail era, online retail is developing faster and faster, undoubtedly occupying the traditional physical retail market. Only companies that can integrate online and offline businesses can be invincible.  Statistics show that in 2016, Amazon's toy sales reached 4 billion U.S. dollars, more than three times higher than the sales of Toys R Us in the same period. Amazon's toy sales increased by 24% last year, while the entire toy industry grew by only 5% during the same period, while sales of Toys R Us have been declining for 5 consecutive years. Affected by the violent impact of online shopping, dozens of **** physical retailers in the United States have filed for bankruptcy this year, and many physical retailers have been forced to lay off employees and close branches.   (Washington Newspaper)    (Original title: Toys R Us in the United States in a development dilemma)    Keywords: Dilemma Toys R Us    Recommended reading: B2B website
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