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800 Toys R Us stores to close

Further to my earlier post about the toy opportunity, Toys R Us has announced all US and UK stores will close. Toy retail around the world will be impacted.

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  1. Lance

    At this stage it appears Australian shops are not affected, but that may change perhaps.

    “Toys ‘R’ Us Australia says local stores will keep trading despite looming closure of US operations”
    http://www.abc.net.au/news/2018-03-15/toys-r-us-australia-says-it-is-business-as-usual/9552844

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  2. Colin

    Lance,

    In August last year, Toys Australia were announcing the opening od 4 stores in a matter of weeks. Toys US filed for bankruptcy very shortly after. The opening of stores would have been totally dependent on the continued operation of Toys network, especially given the $0.5 billion of losses racked up in Aus since Toys opened here.

    The management at Toys Aus better hope they survive, otherwise they can add insolvency while trading, incompetence and misleading others to their woes.

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  3. Lance

    Is there any direct tie between TRUs Aust and TRUs US, or is an agreement concerning use of a brand name ?
    Are the 2 setups actually connected in a business operation ?

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  4. Ken Wilson

    Toys R Us is only trading due to the cash injection from the parent company, it is a loss making business. HOWEVER, they are dedicated toys sellers with focussed management, buyers and sales persons concentrating in one field-TOYS. This business, connected to a world wide supply chain and licensing connections had nothing else to think about other than toys and failed. Good that they will soon be gone… newsagents will do it so more better 🙂

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  5. Pat

    TRU Australia is a subsidiary of TRU US, so it is caught up in the liquidation. From the latest figures, TRU Aust is a borderline situation, it has forecasted profits and when you remove the royalties and administration services charge to US HQ then it is viable based on the reported figures.

    TRU Aust only hopes are either to be taken into TRU Asia. TRU Asia is a joint venture and the venture partner Fung Retailing will probably buy out TRU US or pray that some Private Equity gets them for a steal. It will depend a lot on how reliant TRU Aust is on the US for their supply chain and administration support. If they are relatively independent of US operations then they could probably be sold as a going concern because I don’t think TRU Aust owns any property unlike TRU US which has a decent property portfolio that will be sold off, meaning the stores need to close because I doubt anyone would lease them back to TRU US.

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