Toys"R"Us Will Sell or Close All U.S. Stores

Toys“R”Us, the iconic retail chain that has sold toys and games to millions of children for generations, is closing shop in the United States. After filing for bankruptcy protection in September and suffering through a brutal holiday shopping season, the company decided on Wednesday to close or sell all of its remaining stores, after executives met with creditors throughout the day, according to three people briefed on the discussions. More than 30,000 American jobs are at risk as the company winds down. Liquidation sales will take place over the next few months, as the company clears the shelves at its roughly 880 Toys“R”Us and Babies“R”Us stores around the country.

Total Retail's Take: Following a weak holiday season that presented the perfect opportunity to jump-start the Toys"R"Us comeback — an improving economy, rising consumer confidence — executives at the 70-year-old company decided it was time to wave the white flag. Toys"R"Us has been burdened by $5 billion in debt from a leveraged buyout in 2005, and struggled to keep pace as more competition entered the toy category. According to research from Edison Trends, Amazon.com, Walmart and Target have each taken market share from Toys"R"Us within the last year (see table below). It's sad to see the iconic toy store go by the wayside — especially for kids, who loved roaming the aisles of Toys"R"Us to check out all the latest and greatest merchandise — but this just further reinforces the fact that traditional brick-and-mortar retail businesses need to be constantly evolving to meet the shifting needs of today's consumers. If not, they're doomed for failure.

Credit: Edison Trends