NEW YORK, NY – Year after year Toy giant and massive retailer “Toys R Us” finds itself in a difficult situation fast becoming worse. According to Bloomberg, the company is about to file Bankruptcy and it could come as soon as today.
Toys R Us has been trying to keep up with online retailers such as Amazon and discount stores such as Wal-Mart whom have already out-maneuvered them by far building large bustling online operations, something Toys R Us has been struggling to immolate for nearly a decade.
Now the once category-killer business with 1,600 retail stores in the United States is seeking a loan for up to 5-billion dollars it needs to stock- up on holiday merchandise, and vendors who supply the retail giant with goods are beginning to hold back deliveries – creating a fast developing problem just weeks away from what will become the year’s busiest and most profitable shopping season.
Toys R Us’s financial woes are due to a leveraged buy-out to take the company private about fifteen years ago by its now three private owners Kohlberg Kravis Roberts, Bain Capital and Vornado Realty Trust, but noted as significant contributing factors were its huge debt on its loans and a failure to address necessary online endeavors allowing its competitors to get ahead.
As mentioned in a DomainGang article which tipped me off to the story, Toys R Us owns a long list of Internet addresses that it has, been registering over the years, defensively it seems. But one of these domains stands out to me as a “game changing domain” – one which could help turn the cash-strapped giant into an online behemoth not to be taken lightly in the face of competition, and that is its domain name Toys.com.
Toys R Us does not need to be the night-in-shining armor for the entire retail industry; they’ve got nothing to prove. Although founded in 1948, they too are having the same troubles Sears, JC Penny, and other retailers are having. Why take out such tremendous loans unless you are going to significantly address the underlying issue, and that issue is not going to be solved with borrowing money from Peter to pay Paul in order to stock shelves.
Shut down all or nearly all of its 1,600 retail operations, with that cut down on hundreds of millions in expenses, re-brand simply as Toys.com, putting 95% of efforts into the single place that continues to thrive; online.
If physical retail locations are a must to maintain some level of physical presence, keep open the FAO Schwarz locations in famous places like New York City and simply rename them Toys “R” Us.
Related: Category Killer Domain Shoes.com Acquired in $9M Transaction by Wal-Mart Stores, Inc.
About The Author: John Colascione is Chief Executive Officer of Internet Marketing Services Inc. He specializes in Website Monetization, is a Google AdWords Certified Professional, authored a ‘how to’ book called ”Mastering Your Website‘, and is a key player in several Internet related businesses through his search engine strategy brand Searchen Networks®
Doron Vermaat says
Well said, John. I was exactly thinking this. They won’t have the balls to do it, however, and I’m not entirely sure how a company that size would handle sacking 60k employees at once…
I’m pretty sure that idea is on the table everyday.