The Toys R Us kid is now extinct. The latest victim to online retailer Amazon and the effect of too much screen time for kids is the once cutting edge start-up. The toy giant announced today they are closing all stores across the nation, including five in the Kansas City area.
Kansas City area locations include:
- 8330 N. Broadway in Kansas City
- 8640 N. Madison Ave. in Kansas City (Babies ‘R’ Us)
- 13920 E. U.S. Highway 40 in Independence
- 11620 W. 95th St. in Overland Park
- 8500 W. 135th St. in Overland Park (Babies ‘R’ Us)
It is not immediately known how the closures or bankruptcy will affect the huge Toys R Us warehouse facility in south Lee’s Summit. It will undoubtedly need to remain open to handle returns and inventory from the closed stores.
The chain’s bankruptcy threatens up to 33,000 American jobs in the coming months, according to The Wall Street Journal, citing it as one of the biggest retail liquidations since Sports Authority in 2016.
It will take several months to close all 740 U.S. stores. And it will force toy makers and commercial real estate landlords who depended on the chain to scramble.
CEO David Brandon told employees Wednesday the company’s plan is to liquidate all of its U.S. stores, according to an audio recording of the meeting obtained by The Associated Press.
Brandon said Toys R Us will try to bundle its Canadian business, with about 200 stores, and find a buyer. The company’s U.S. online store would still be running for the next couple of weeks in case there’s a buyer for it. Workers in the U.S. will get paid for the next 60 days if they show up for work, but after that all benefits and pay will be cut, Brandon told employees at the meeting, according to the recording. Some workers will be asked to stay longer to help with the liquidation.
The AP reports that Toys R Us has been hurt by the “shift to mobile devices taking up more play time. But steep sales declines over the holidays and thereafter were the deciding factor.
Part of the problem was brought on by Toys R Us itself after failing to recognize the need for change or adapt according to the Wall Street Joural. J.C. Penney opened toy sections last fall in all 875 stores. Target and Walmart have been expanding their toy selections. Even Party City is building up its toy offerings.
“Amazon may pick up the dollars, but won’t deliver the experience needed for a toy retailer to survive and thrive in today’s market,” said Marc Rosenberg, a toy marketing executive.
Toys R Us had dominated the toy store business in the 1980s and early 1990s, when it was one of the first of the “category killers”— a store totally devoted to one thing. Its scale gave it leverage with toy sellers and it disrupted general merchandise stores and mom-and-pop shops. Children sang along with commercials about “the biggest toy store there is.”
It will no doubt lead to more discussion of the effect of Amazon and other online retailers on the nation’s store-front business health. There are already calls for Amazon to be considered for break-up under anti-trust laws as it positions itself to replace everyone from the local mom-and-pop to your local grocer. If Amazon were to successfully see its plans realized, millions of jobs would be lost across the country.
–Dwight Widaman and wire services
