Brand Audit: Toys R Us

Toys R Us

Toys “R” Us is an international toy, clothing, video game, and baby product retailer owned by Tru Kids, Inc. (d.b.a. Tru Kids Brands) and various others. It was founded in April 1948, with its headquarters located in Wayne, New Jersey, in the New York metropolitan area.

 

Brief history

Founded by Charles Lazarus in its modern iteration in June 1957, Toys “R” Us traced its origins to Lazarus’s children’s furniture store, which he started in 1948. He added toys to his offering, and eventually shifted his focus. The company had been in the toy business for more than 65 years and operated around 800 stores in the United States and around 800 outside the US, although these numbers have steadily decreased with time. Toys “R” Us expanded as a chain, becoming predominant in its niche field of toy retail, and also branched out into baby supplies and children’s clothing. At its peak, Toys “R” Us was considered a classic example of a category killer. With the rise of mass merchants, as well as online retailers such as Amazon.com, Toys “R” Us began to lose its share of the toy market.

The company filed for Chapter 11 bankruptcy protection on September 18, 2017, and its British operations entered administration in February 2018. In March 2018, the company announced that it would close all of its U.S. and British stores. The British locations closed in April and the U.S. locations in June. The Australian wing of Toys “R” Us entered voluntary administration on May 22 and closed all of its stores on August 5, 2018. Operations in other international markets such as Asia and Africa were less affected, but chains in Canada, parts of Europe and Asia were eventually sold to third-parties.

The company continues to operate as the licensor of the chain’s international operations, but its lenders announced in October 2018 that it planned to re-launch the U.S. Toys “R” Us retail business in the future, citing the value of its brand. The lenders also partnered with Kroger to add “Geoffrey’s Toy Box” (named after the chain’s mascot) pop-up departments to selected locations in order to give Toys “R” Us a presence during the holiday shopping season.

On January 20, 2019, the company emerged from bankruptcy as Tru Kids.

 

Analysis

Number of stores: 739 in the US, 750 international stores and 245 licensed stores in 37 countries

Number of employees affected: 31,000

 

Business model

 

Market

IP – .com domain is operational and provides a very limited offer of what it used to be.

Stats

Main rival: Smyths

The $64,000,000 dollar question – ‘What can we learn when the mighty fall?’

Owned by: Tru Kids Brands

Trading: Active

 

Problems with the brand

The company’s biggest problem: It was saddled with billions of dollars in debt. That debt stopped it from making the necessary investment in stores. And that meant an unpleasant shopping experience that doomed the chain.

CEO David Brandon stated that the brand had fallen behind competitors in regard to general upkeep and condition of its stores.

Poor customer experience which did not showcase the products in such a big, cold warehouse environment.

With unemployment at a record low, workers had more opportunity to shop around for steady employment. Toys R Us struggled like so many retailers to attract and retain workers. This was in part to paying at or close to the minimum wage. Unfortunately, Toys R Us did not have the financial ability to offer a competitive remuneration package.

 

 

 

Conclusion

Whilst Toys R Us were slow to adapt to an online consumer market, stiff competition from rival competitors Smyths and Amazon provided the customer with more choice and at a lower cost.

 

 

Sources:

Wikipedia

CNN Business

CNN Business

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