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(Marketwatch)   Toys "R US: Losses R us   (marketwatch.com) divider line 33
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1420 clicks; posted to Business » on 13 Jun 2014 at 12:49 PM (9 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-06-13 12:08:27 PM
While I question the long term future of any brick and mortar retail outlet, Toys R Us has actually done a pretty good job recovering from being on the brink of bankruptcy and complete extinction a decade ago, to where they are now. Part of that of course is due to the fact that they were able to hang on long enough to outlive and acquire all their other competitors in the market, and the fact that Target and Wal*Mart have greatly reduced their focus on that sector, but still, they're very much a success story in turning around an otherwise failing company.
 
2014-06-13 12:56:41 PM
I went there a month ago and there was not one single item related to the movie Frozen. It's only the best-selling animated movie of all time, and currently by far the most popular brand with girls of a certain age. Why the hell should the toy store have anything related to it?
 
2014-06-13 12:59:07 PM

skrame: I went there a month ago and there was not one single item related to the movie Frozen. It's only the best-selling animated movie of all time, and currently by far the most popular brand with girls of a certain age. Why the hell should the toy store have anything related to it?


They have way too much back inventory I'm guessing, and someone foolishly decided to try and sell the crap they had before getting the fresh crap. Unfortunately kids are freaking monsters of consumption and only want the absolute avante garde of shiat.
 
2014-06-13 01:01:09 PM

skrame: I went there a month ago and there was not one single item related to the movie Frozen. It's only the best-selling animated movie of all time, and currently by far the most popular brand with girls of a certain age. Why the hell should the toy store have anything related to it?


Blame that on Disney totally underestimating the popularity of Frozen.  It takes time to whip the production lines up to speed, even in China.
 
2014-06-13 01:14:01 PM
You're target market is children, they have like no buying power, what did you expect?  You should take a page from Radio Shack and focus on smart phones and smart phone accessories.
 
2014-06-13 01:19:39 PM
Cash-strapped parents can't afford toys if they can't afford food and rent - news at 11.

I feel bad for my son sometimes because he rarely gets toys for anything but a birthday or holiday (I don't buy cheap, $2 stuff like a lot of parents do in between), but does he really need *all* the toys?
 
2014-06-13 01:40:48 PM
I wonder how the coming wave of maker technology is going to impact toy sellers?  Will people just download blueprints into their makers and print out 3D plastic toys?  Seems like the way things are going.
 
2014-06-13 01:51:34 PM
We be po?
 
2014-06-13 02:11:47 PM

Kali-Ma: Cash-strapped parents can't afford toys if they can't afford food and rent - news at 11.

I feel bad for my son sometimes because he rarely gets toys for anything but a birthday or holiday (I don't buy cheap, $2 stuff like a lot of parents do in between), but does he really need *all* the toys?


Don't feel bad - honestly. No, he doesn't NEED every toy. We do the same with our kids. In fact, damn near all their toys were bought by a family member for some holiday.
 
2014-06-13 02:21:03 PM
Crappy formatting "R US
 
2014-06-13 02:24:02 PM

spman: Part of that of course is due to the fact that they were able to hang on long enough to outlive and acquire all their other competitors in the market, and the fact that Target and Wal*Mart have greatly reduced their focus on that sector, but still, they're very much a success story in turning around an otherwise failing company.


I'd argue that Wal-Mart's recent implosion due to staffing and inventory mismanagement is probably one major reason why Toys 'R Us is still around.  The Target data breech probably has helped as well, although to a lesser extent.


FTA: Toys 'R Us has struggled against a stiffer competition from online rivals, such as Amazon.com Inc., and other big-box retailers.

They should be terrified of Amazon.  I know a lot of people who have signed up for Amazon Prime and who do all of their shopping through them.  They've fundamentally altered how they shop because of AP.

I think the only thing that is going to save specialty stores is if they band together and form a partnership with other unrelated specialty stores.  Think of Hulu, but for shopping.  Unified shopping portals, more unified warehouse and shipping logistics...  it is the only thing I can think of that makes for an easier user experience and that reduces costs and shipping turn-around.
 
2014-06-13 02:33:36 PM

Incontinent_dog_and_monkey_rodeo: I wonder how the coming wave of maker technology is going to impact toy sellers?  Will people just download blueprints into their makers and print out 3D plastic toys?  Seems like the way things are going.


Maybe eventually, but low-end makers will have to get better and cheaper for that to happen.
 
2014-06-13 02:45:10 PM

Dinjiin: They should be terrified of Amazon.  I know a lot of people who have signed up for Amazon Prime and who do all of their shopping through them.  They've fundamentally altered how they shop because of AP.

I think the only thing that is going to save specialty stores is if they band together and form a partnership with other unrelated specialty stores.  Think of Hulu, but for shopping.  Unified shopping portals, more unified warehouse and shipping logistics...  it is the only thing I can think of that makes for an easier user experience and that reduces costs and shipping turn-around.


Not a terrible idea, but the number of companies that can do that are somewhat limited. Its also a logistics nightmare.

TRU dabbled with a centralized portal of sorts idea a dozen or so years ago. When they first went online, they basically did all of their fulfillment and processing through amazon. The problem is, the already small margins get even smaller when someone else is getting a cut. Then you have all kinds of fights about product placement, branding, experience, etc.

An advantage that specialty places like TRU have over say, your local best buy, is that kids will always want to go to a toy store. Parents of newborns, while they might not care who they get their diapers from, will still want to see clothes, furniture, etc in person.

The challenge now becomes pricing. You obviously have a higher overhead than amazon, but if you charge too much of a premium, someone is just going to use you as a showroom, and then go with whoever has the best price. And really, we are talking about a couple bucks difference. While I might fork over an extra 5, maybe even 10 bucks for the stroller I want if I'm already in the store and its in front of me, when we get above that, I, and most people, are going to just look it up online and go with whoever has the best price, even if we have to wait a few days for it.

If we lose brick and mortar all together, it becomes a problem for lots of things. If its an item I'm buying just off features, sure, maybe I can get away with looking at a few reviews and its specs. But if its something like a stroller, I want the thing infront of me to get a sense of how its built, if its comfortable, how easy it moves around, and whatever the hell else is important in strollers. If it becomes something that you are just buying off of some reviews and what comes up first in google, we will suddenly find ourselves in a world with exactly 3 strollers to choose from.
 
2014-06-13 02:45:34 PM
My wife used to work for that company.  It's the Mos Isley of toy stores.
 
2014-06-13 02:52:41 PM
Man, I remember my mom taking me to the toy store to buy $3 packages of G,I. Joe figures. They were pretty awesome for the price, although their thumbs broke off every time, eventually.

I go to the toy store now for my nephew and it's ridiculous. You have to spend like $20 for a crummy Transformer or Iron Man figure. If you want to good one that does more, is more poseable and looks like it's made out of more than just a single hunk of cheap unpolished plastic, you have to spend nearly twice that.

With a kiddo on the way next November, I'm really not looking forward to toy shopping.
 
2014-06-13 03:01:09 PM
And honestly I think its something for Uncle Sam to get involved with. Cut some nice tax breaks for brick and mortar locations. Do whatever you can to lower those fixed costs so they can compete price wise. Otherwise a lot of jobs go away, and many of the people in those jobs aren't people who can suddenly transition to a new economy type job.
 
2014-06-13 03:33:49 PM

bambi121899: Kali-Ma: Cash-strapped parents can't afford toys if they can't afford food and rent - news at 11.

I feel bad for my son sometimes because he rarely gets toys for anything but a birthday or holiday (I don't buy cheap, $2 stuff like a lot of parents do in between), but does he really need *all* the toys?

Don't feel bad - honestly. No, he doesn't NEED every toy. We do the same with our kids. In fact, damn near all their toys were bought by a family member for some holiday.


Same here.  Once or twice a year Dad would let me pick out a paperback book from the YA book spinner in the grocery store as a reward for helping with the grocery shopping, but other than that it was birthdays and Xmas.

/once inherited a MASSIVE amount of Barbie toys from a family that asked if we wanted some hand-me downs
//I'd say it was like Christmas, but really it was more like 8 at once - so what if the designs were 10 to 15 years old?
 
2014-06-13 03:34:29 PM

Dinjiin: They should be terrified of Amazon.  I know a lot of people who have signed up for Amazon Prime and who do all of their shopping through them.  They've fundamentally altered how they shop because of AP.


I needed some blue Loctite threadlocker the other day, so I went to Lowe's to buy some, since I was in the area. After asking 10 different people, each one either telling me to find someone else or look in someplace completely random, I finally gave up. I must have spent 45 farking minutes looking for this shiat.

In the end I just ordered it from Amazon. Lesson learned? Retail doesn't give a fark about helping you out. Their ONE advantage over Amazon would be great customer service, but they also don't want to pay their employees enough to care.

So, Bye bye Lowe's.
 
2014-06-13 03:56:32 PM
Dunno about toys r us in the USA, but Canadian TRU are horribly overpriced and tend to sell low quality merchandise. You rarely get any decent service and the inventory system is apparently running on Windows ME. Or it only updates once every few days. Or employees are too stupid to use it right. Or all of the above.

The only reason to go is if someone buys you a gift card.
 
2014-06-13 04:15:39 PM

wooden_badger: skrame: I went there a month ago and there was not one single item related to the movie Frozen. It's only the best-selling animated movie of all time, and currently by far the most popular brand with girls of a certain age. Why the hell should the toy store have anything related to it?

Blame that on Disney totally underestimating the popularity of Frozen.  It takes time to whip the production lines up to speed, even in China.


They are clearly not using enough whips.
 
2014-06-13 04:47:57 PM

Cold soup: Man, I remember my mom taking me to the toy store to buy $3 packages of G,I. Joe figures. They were pretty awesome for the price, although their thumbs broke off every time, eventually.

I go to the toy store now for my nephew and it's ridiculous. You have to spend like $20 for a crummy Transformer or Iron Man figure. If you want to good one that does more, is more poseable and looks like it's made out of more than just a single hunk of cheap unpolished plastic, you have to spend nearly twice that.

With a kiddo on the way next November, I'm really not looking forward to toy shopping.


Some unsolicited advice, from the proud father of a 2.5 YO boy.:

0-6 Months: Soft stuff that makes sounds and has bright colours.
6-12 Months: Stuff they can grasp and is safe to put in their mouth
12-18: Stuff they can push and use to walk
18-24: Toys they can manipulate and build/stack.
24-30: Stuff that reacts to them
30+: Stuff that they can 'play' with.

You'll be their main entertainment anyway for the first 6-12 months. Anything else is just a distraction.
Stick to the basics, avoid the electronics.
 
2014-06-13 04:53:08 PM

MithrandirBooga: I needed some blue Loctite threadlocker the other day, so I went to Lowe's to buy some, since I was in the area. After asking 10 different people, each one either telling me to find someone else or look in someplace completely random, I finally gave up.


Both Home Depot and Lowes have a small section with various adhesives, super glues and epoxies, and Loctite is usually in there.  It is either near the plumbing section or the wall adjacent to the garden department.  And yes, I wandered the store for about 10 minutes after asking like 3 people for help as well.

Large brick and mortar stores really need to have item lookup stations at regular intervals.  Ikea has them for their warehouse section, and they're a lifesaver.  Even if they weren't as exact as Ikea's, at least point me to the correct side of an aisle.  If you can narrow it down to about 25' worth of shelving, I'd be happy.
 
2014-06-13 05:00:55 PM
The toy market is very small compared to what it was 20 years ago.

Kids today play video games. At least, once they hit about 6 or 7 years old. There are VERY FEW traditional toys that kids like once they are past that age. Young girls still like Barbies. Young boys still like action figures. But they like video games better.

And video games are cheaper at Wal-Mart. Hell, these days you can just download most of them.
 
2014-06-13 06:34:40 PM
We have shopped at T'RU for some stuff. Personally, the one closest to us seems about as clean and well-run as a WalMart store.

/if you know what I mean, and I think you do
 
2014-06-13 06:43:11 PM
I enjoy the selection of toys r us, especially their legos, but goddamn, do you really need to sell ABOVE the MSRP?  and like the previous commentor, tried to find an elsa frozen doll, and they had nothing.

they also have a nice variety of freaking huge teddy bears.

and bikes.

and just a lot of stuff in general.
 
2014-06-13 06:55:05 PM
TRU's future lies in babies r us and international sales, unless it manages to get exclusive products. Its tablet operations are going nowhere.

Toys r us will be filing for bankruptcy, unless its private equity owners put more cash in. At its current burn rate it has less than 2 quarters of cash left and already has negative equity.
 
2014-06-13 07:07:58 PM

wooden_badger: skrame: I went there a month ago and there was not one single item related to the movie Frozen. It's only the best-selling animated movie of all time, and currently by far the most popular brand with girls of a certain age. Why the hell should the toy store have anything related to it?

Blame that on Disney totally underestimating the popularity of Frozen.  It takes time to whip the production lines up to speed, even in China.


There were tons of those sets out before the theatrical release.. haven't seen farkall since. My daughter received some gift cards for her birthday last month. Target and Toys R Us were both out of Frozen items.She loves playing with the 4" Disney/Polly Pocket dolls (with the changeable clothes and what not), but I'm amazed by how poor their quality/build is. The first time an Ariel had her head pop off while changing a dress, I was like "these are coming from the same company who has been making action figures for 40ish years?"

But yeah, they were out. So instead of more of those Disney dolls/figures, she got Lego Friends. So it's probably for the best. I have no problem buying Lego sets... their quality is still unbeatable. Hell, my kids will most likely be able to build my 1983 sets with their own grandchildren.


Nexzus: 0-6 Months: Soft stuff that makes sounds and has bright colours.
6-12 Months: Stuff they can grasp and is safe to put in their mouth
12-18: Stuff they can push and use to walk
18-24: Toys they can manipulate and build/stack.
24-30: Stuff that reacts to them
30+: Stuff that they can 'play' with.


My 14-month-old has three favorite little bins of toys right now - the jumbo Mega Bloks, some Fisher Price Little People (he loves spinning the wheels on the cars), and my Astrosniks from 1983. Around this same age, my daughter's favorite toy was a $10 interactive Leap Frog "laptop" (which my son has zero interest in).

You have some good rules of thumb, but every kid is going to be just a little different from the next one during those first few months.
 
2014-06-13 07:22:27 PM

Smeggy Smurf: My wife used to work for that company.  It's the Mos Isley of toy stores.


Mos Eisley spaceport...


/nsfw?
 
2014-06-13 08:49:33 PM

deadsanta: skrame: I went there a month ago and there was not one single item related to the movie Frozen. It's only the best-selling animated movie of all time, and currently by far the most popular brand with girls of a certain age. Why the hell should the toy store have anything related to it?

They have way too much back inventory I'm guessing, and someone foolishly decided to try and sell the crap they had before getting the fresh crap. Unfortunately kids are freaking monsters of consumption and only want the absolute avante garde of shiat.


Funny, but I noticed your Fark handle before I read your comment, and it added credence to your otherwise random speculation. I'm going to accept opinion and move on.
 
2014-06-13 09:47:07 PM
I currently work at TRU (after getting let go from a good paying job I held for 10 years).

Mattel does not send enough Frozen toys to us. When we do get any dolls they are sold out within 20 minutes of opening after being put on the shelves the morning they are delivered. TRU shouldn't be blamed for the limited availability of toys, but consumers will inevitably blame the store.

Many toys are poorly made, but again that is the manufacturers fault. Many companies (including Hasbro and Mattel) are even getting cheap on the glue that holds bubbles on the card for toys (like action figures), so they fall off right out of the case. When you see an open Star Wars action figure in a store, it's not necessarily from someone opening there. If customers want quality toys (like LEGO or Playmobil) they have to be willing to pay higher prices for them or take advantage of the right sales. TRU has lowered prices on many items to (or closer to) MSRP, but most people still think of TRU as a price-gouger.

One problem is that TRU does not care about their employees. They would prefer to have everyone work 4-5 hour shifts to limit the number of breaks they have to allow (info direct from the main manager at my store). Of course, that means employees have less money to spend on anything at their workplace.

I was already a collector of some toys (mainly LEGO) when I was hired. When they do have an employee who knows a lot about their inventory, they fail to utilize that. Case in point: A manger told me I often amaze them with my product knowledge, then the next day I am told my new job will be scraping crud off floor tile as part of their "clean & bright" initiative.

They do have a good system to ensure products that are depleted from shelves get from the stockroom to the sales floor, but 1 - they don't want to invest in time to train employees to use it correctly 2 - disgruntled employees are less likely to care about physically getting those products on the shelves/pegs 3 - some data in the system doesn't mesh so the stockroom gets backed up with products the computer says should go out in higher quantities than what actually fits in the allotted space.
 
2014-06-13 10:59:58 PM

NeilJam42: I currently work at TRU (after getting let go from a good paying job I held for 10 years).

Mattel does not send enough Frozen toys to us. When we do get any dolls they are sold out within 20 minutes of opening after being put on the shelves the morning they are delivered. TRU shouldn't be blamed for the limited availability of toys, but consumers will inevitably blame the store.

Many toys are poorly made, but again that is the manufacturers fault. Many companies (including Hasbro and Mattel) are even getting cheap on the glue that holds bubbles on the card for toys (like action figures), so they fall off right out of the case. When you see an open Star Wars action figure in a store, it's not necessarily from someone opening there. If customers want quality toys (like LEGO or Playmobil) they have to be willing to pay higher prices for them or take advantage of the right sales. TRU has lowered prices on many items to (or closer to) MSRP, but most people still think of TRU as a price-gouger.

One problem is that TRU does not care about their employees. They would prefer to have everyone work 4-5 hour shifts to limit the number of breaks they have to allow (info direct from the main manager at my store). Of course, that means employees have less money to spend on anything at their workplace.

I was already a collector of some toys (mainly LEGO) when I was hired. When they do have an employee who knows a lot about their inventory, they fail to utilize that. Case in point: A manger told me I often amaze them with my product knowledge, then the next day I am told my new job will be scraping crud off floor tile as part of their "clean & bright" initiative.

They do have a good system to ensure products that are depleted from shelves get from the stockroom to the sales floor, but 1 - they don't want to invest in time to train employees to use it correctly 2 - disgruntled employees are less likely to care about physically getting those products on the shelves/pegs 3 - some ...


I am curious, when the GI Joe movies came out where you there?  Was there a significant increase in GI Joe dolls being sold for each movie?
 
2014-06-14 02:34:55 PM

NeilJam42: TRU has lowered prices on many items to (or closer to) MSRP, but most people still think of TRU as a price-gouger.


That might be because when I go in, everything that I think I might want to buy is still 25-30% above MSRP, or not in stock, or there's nobody in the electronics section to check me out, or whatever.

The TRU near my house reminds me more of K-Mart than Wal-Wart. Prices are higher than MSRP, there's an off putting smell, it's dark, and it just seems unclean. I think the best that could happen to it(For everyone except the employees) is that it gets struck by lighting, burns to the ground, and stays closed.
 
2014-06-14 03:00:52 PM

NeilJam42: TRU has lowered prices on many items to (or closer to) MSRP, but most people still think of TRU as a price-gouger.


...why wouldn't we? There are two options when TRU is selling items at higher prices.
1. They are price gouging
2. Their buying/negotiating power has declined significantly in the last decade.

And if anyone tries to tell me that #2 is the case... that TRU has less negotiating power than farking Barnes & Noble does when it comes to LEGO sets... I'll say they're lying. It's a Bain Capital business. Therefore it's price gouging.

NeilJam42: Many companies (including Hasbro and Mattel) are even getting cheap on the glue that holds bubbles on the card for toys (like action figures), so they fall off right out of the case. When you see an open Star Wars action figure in a store, it's not necessarily from someone opening there.


Now, that's depressing to learn. But certainly believable. Hasbro and Mattel are both extremely aware of the second-hand market for some of their toys.

NeilJam42: If customers want quality toys (like LEGO or Playmobil) they have to be willing to pay higher prices for them or take advantage of the right sales.


Imaginext seems to be the outlier there. Those toys are cheaper than dirt... but for being a poor man's Playmobil, they seem pretty darn child-proof.
 
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