There was no Toys “R” Us store in the town where I grew up. The closest one was a thirty minute drive and trips to the city to go window shopping for toys wasn’t exactly high on my family’s list of priorities. I don’t remember how old I was when I finally stepped foot in one, but I do remember that it was the closest thing I had to a religious experience in my young life.
Up until then TRU existed only in Saturday morning cartoons and my fevered imagination. But when I found myself in one for the first time, standing in aisles filed with my favourite toys from floor to ceiling and stretching as far as my eye could see, well I’m pretty sure I may have dropped to my knees. There may have even been a chorus of angels singing hymns in the background.
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I’ve been thinking a lot about my handful of childhood shopping trips to TRU lately. As you can imagine, my nostalgia was inspired by the news that the toy giant is closing its American stores (along with its UK and Australia divisions). And while Geoffrey’s keeping his doors open north of the border, if recent attempts to buy the healthier (yet still beleaguered) Canadian arm fail, Canada’s 82 locations will follow suit and could also find themselves shuttered by year’s end.
While there’s no definite word how many Canadians would lose their jobs should Canada’s TRU suffer that fate, anywhere from 31 to 33 thousand Americans are about to find themselves out of work. That number could easily grow when toy manufacturers resort to laying people off to cope with reduced sales (California based MGA Entertainment, who is spearheading a bid to buy the Canadian arm and is trying to rescue as many American stores as possible, admits that Toys “R” Us is responsible for up to 20% of its toys sales).
Like thousands of others who grew up idolizing it, I fell out of touch with Toys “R” Us as an adult. I usually completed my Christmas shopping at the likes of Indigo, Walmart, The Disney Store or Amazon in recent years. Stiff competition, from both online and brick and mortar stores, is one of the reasons Geoffrey the Giraffe faces extinction today.
But while I am deeply saddened by TRU’s impending closure, I don’t feel the slightest bit guilty about my shopping habits.
Like many things (Saturday morning cartoons, various movie franchises, Christmas and Halloween), my fondness for Toys “R” Us is rooted strictly in nostalgia. I still vividly remember its TV commercials and catchy jingles (you know the one), thumbing through it’s flyers and Christmas catalogue (circling my heart’s desires along the way) and desperately trying to convince my parents to take me to the next celebrity appearance (I never managed to convince my mother of the emotional benefits provided by seeing Optimus Prime and Hulk Hogan at the Toys “R” Us in Miami).
But my shopping behaviour as an adult reflects why Geoffrey is going under.
The story of TRU’s decline has already grown stale. A lot of people (both inside the industry and out) could see this coming miles down the road. While a lot of people like to point the finger at Amazon, the truth is Toys “R” Us started down the path towards irrelevancy and bankruptcy in the mid-90’s, years before anyone even heard of online shopping.
Mismanagement and failure to read consumer trends had begun nibbling away at Geoffrey’s bottom line before e-commerce was even a thing. And when Toys “R” Us did get into the Internet game, they thought signing a deal with Amazon to let them handle online sales was a good idea.
By the time Toys “R” Us managed to free itself from Amazon’s clutches in 2006 (after millions of dollars in legal fees), it found itself behind the online 8 ball, it was rapidly losing market share to big box retailers like Walmart and Target (who were selling many of the hottest toys at a loss to attract shoppers) and it wasn’t able to shake its reputation for uncompetitive pricing.
But the straw that broke the Giraffe’s back in came in 2005, after a complicated leveraged buyout by a number of hedge funds (including Mitt Romney’s Bain Capital) took the company private and saddled it with billions of dollars of debt (while stripping it of most of its assets).
The burden was so heavy that Toys “R” Us wasn’t able to invest in innovations, renovations or new product lines and by the time it threw in the towel last week, the American stores were buried under more than five billion in debt.
The simple truth is many of Geoffrey’s wounds were self inflicted.
Just to add insult to injury, it looks as though like Geoffrey is taking a page from Sears Canada’s book and not giving the rank and file employees any severance (even though Bankruptcy court approved possibly giving managers and other higher ups millions in bonuses last Christmas). And that doesn’t earn any sympathy from this corner.
The Internet has been overflowing with a lot of nostalgic outrage the last two weeks (I’ve even added my own two cents to it, if I’m being honest). But while complaining about the death of an entire generation’s childhood and the consequences of capitalism run amok, it’s easy to overlook that Toys “R” Us is largely responsible for getting itself into this mess. And let’s not lose sight of the fact that during Geoffrey’s rise to dominance in the 80’s and 90’s, Toys “R” Us put its fair share of competing retail chains out of business before finding itself staring down that same barrel (with Walmart and Amazon’s finger on the trigger).
While I will miss Toys “R” Us and sincerely hope the Canadian stores can be saved (and the ship righted so they don’t find themselves back in the same boat in another five years), I just can’t bring myself to feel that much sympathy for the former king of toydom’s jungle.
My heart goes out to the thousands of people about to lose their jobs, whether at Toys “R” Us or somewhere else in the economic food chain as a result of its collapse. I’ll miss seeing the commercials (particularly at Christmas) and hearing children squeal with delight at the prospect of visiting a store. If I walk past an empty location over the next few months, you can bet a heartstring or two will get a serious tugging and a nostalgic tear may try to make it’s ay to my eye.
But at the end of the day retail is survival of the fittest and Geoffrey was neither agile nor smart enough to escape his fate. Yes there were some other factors at play with Geoffrey’s demise (looking at you Mr. Romney) but Geoff wouldn’t have found himself in such a vulnerable position if he had have done a better job in the first place (no one outside of TRU’s head office thought that Amazon deal was a smart idea).
Things only find themselves in history’s dustbin if they can’t adapt and survive the challenges they face. The present becomes the past only because it isn’t strong enough to survive the future. After spending years at the top of the industry’s food chain, Toys “R” Us proved unable to adapt and survive. It turns out Geoffrey had more in common with a gazelle than a giraffe, and he simply couldn’t outrun the lions of change.
It turns out that part doesn’t bother me in the slightest.
Image via MomCom
