Archive for month: March, 2018

By Hayley Peterson

• Toys R Us said its gift cards will expire in 30 days as the company prepares to close or sell all its US stores.
• The toy chain’s loyalty-based “rewards dollars” and “endless earnings” will also expire in 30 days, the company told Business Insider.
• If customers don’t use their gift cards and loyalty points within 30 days, the rewards will lose their value.
• When Borders began liquidating its stores in July 2011, about 17.7 million gift cards were left outstanding.
• Customers filed a lawsuit to recoup their losses, but a judge ruled that the gift cards — worth an estimated $210.5 million — would not be refunded.

Toys R Us said Thursday that its gift cards will expire in 30 days as the company prepares to close or sell its more than 700 US stores.

If shoppers don’t use their gift cards by the expiration date, then the cards will lose their value. The toy chain’s loyalty-based “rewards dollars” and “endless earnings” will also expire in 30 days, the company told Business Insider.

Toys R Us said in a bankruptcy filing Thursday that it must liquidate. Gift card holders are now among a vast group of creditors — including Toys R Us suppliers — that will be looking to get paid back through the liquidation process.

“To say the vultures are circling is probably an understatement,” said Larry Perkins, the CEO and founder of the advisory firm SierraConstellation Partners. “It’s highly unlikely that there will be any meaningful piece of the business that remains,” after a liquidation, he said.

Shoppers often fail to recoup the money left on unused gift cards during retail bankruptcies.

When Borders began liquidating its stores in July 2011, about 17.7 million gift cards were left outstanding. Several customers filed a lawsuit to recoup their losses, but a judge ruled that the gift cards— worth an estimated $210.5 million — would not be refunded.

Oftentimes, retailers that are liquidating will publicly announce a deadline by which shoppers must use their gift cards.

Toys R Us filed for bankruptcy in September and recently started clearance sales at about 170 stores that it plans to permanently close in April.

Going-out-of-business sales at Toys R Us stores will likely begin within a matter of weeks, according to Corali Lopez-Castro, a bankruptcy lawyer and managing partner at Kozyak Tropin and Throckmorton.

“Toys R Us is not going to want to drag this out,” Lopez-Castro told Business Insider in an interview last week.

Click here for the original article.

The extinction of Toys R Us has begun. The iconic and financially ailing retail giant announced it would begin to shutter or sell every store in the U.S. market. Toys R Us officials broke the news to their employees on Wednesday, a message that also threatens up to 33,000 American jobs in the coming months, the Wall Street Journal reported.

By: Josie Rhodes Cook

Bad news, parents. There are some reports that Toys “R” Us may close all of its U.S. stores, after holiday sales failed to help the toy retailer bounce back from filing for bankruptcy in the fall. Right now, the only thing that’s certain is that Toys “R” Us Inc. is preparing to liquidate its bankrupt United States operations after failing to find a buyer or reach a debt restructuring deal with lenders, according to Bloomberg. But experts say the future of the popular toy store looks bleak.

Taylor O’Donnell, a Coordinator for Corporate Communications at Toys “R” Us, tells Romper via email on Friday, “We do not have a comment to share at this time.”

Toys “R” Us is preparing to potentially close all U.S. stores following weak holiday sales, according to Business Insider. And that means blowout liquidation sales at all of the company’s roughly 800 stores could begin within weeks, according to Corali Lopez-Castro, a bankruptcy lawyer and managing partner at KozyakTropin and Throckmorton who spoke with Business Insider. And while that might sound like good news to parents and families in the short term (yay! toy sales!), the closing of Toys “R” Us could have a ripple effect that could damage the toy industry and change the way toys are sold forever, and that’s not-so-great news.

Sources told CNBC that Toys “R” Us may soon liquidate its U.S. operations, but at least one person cautioned that “the situation remains fluid,” so it’s really anyone’s guess what could happen next. But in general, if sales and expectations haven’t bounced for the company yet, it’s not looking good for the stores’ future, and the little girl in me who used to eagerly look through Toys “R” Us catalogs as a kid is a bit devastated, to be honest.

If Toys “R” Us Inc. does move forward with liquidating, Lopez-Castro told Business Insider that, “Toys R Us is not going to want to drag this out.” The outlet reported that the longer the stores remain open, the more rent Toys “R” Us will owe to its landlords — and that wouldn’t be a smart move or at all sustainable for a company that owed debt to the tune of $5.2 billion in September, according to Reuters.

But CNBC noted that Toys “R” Us “accounted for 15 to 20 percent of U.S. toy sales last year,” and if the retailer does close all of its stores here in the States, those toy sales won’t all be absorbed by other retailers in the aftermath. In fact, around 10 to 15 percent of that volume of sales would simply “fall through the cracks and be lost for good,” the outlet reported.

A lot of products would shift to being sold through channels like Amazon or Target instead, so it’s not as if parents need to panic over not being able to find toys easily just yet. But toy giants like Hasbro and Mattel are even nervous, and they’ve got a lot more power than small toy brands, which could be in trouble.

The way CNBC explained it, because Toys “R” Us is so massive, it can sell both name-brand toys and products from smaller, less commercially successful toymakers. But if Toys “R” Us closes, other big-box retailers probably won’t take in those smaller brands because they already have limited space in toy sections. So small toy manufacturers will have more trouble succeeding, and that’s a shame for kids everywhere who would miss out on the creativity and innovation of more small-scale designers and inventors. Not everyone can turn to Shark Tank, after all.

The closure of all U.S. Toys “R” Us locations could be either good or bad for more suburban or rural communities where Toys “R” Us may be the only game in town when it comes to toy stores. There’s a chance that smaller, independent toy stores could pop up in their wake. Or there’s a chance that for parents with limited options, online shopping may become their only choice.

Nothing is set in stone yet. We know for sure that several U.S. Toys “R” Us stores have closed, or will close soon. But as far as the news that every store in the U.S. could shutter, that’s still based mostly on sources, and I suppose there’s a chance a buyer could swoop in at the 11th hour and save Toys “R” Us. But if that doesn’t happen, we might have to say goodbye to Toys “R” Us forever. It could truly be the end of an era for a lot of people who grew up loving the toy retailer.

Click here for the original article.

By Hayley Peterson

 

• Toys R Us is preparing to potentially close all of its US stores as part of a liquidation, according to several reports.
• Blowout clearance sales at its roughly 800 stores could begin within a matter of weeks, according to Corali Lopez-Castro, a bankruptcy lawyer and managing partner at Kozyak Tropin and Throckmorton.

Toys R Us is preparing to potentially close all of its US stores after weak holiday sales thwarted its plans to restructure the business through bankruptcy proceedings, according to several media reports.

That means blowout liquidation sales at its roughly 800 stores could begin within a matter of weeks, according to Corali Lopez-Castro, a bankruptcy lawyer and managing partner at Kozyak Tropin and Throckmorton.

If the event of a liquidation, “Toys R Us is not going to want to drag this out,” Lopez-Castro said.

The longer the stores stay open, the more rent Toys R Us will owe to its landlords.

The company would only need a few weeks to heavily advertise the sales before kicking them off, she said.

Toys R Us could announce whether it will liquidate its stores as soon as Monday following a bankruptcy hearing, the Wall Street Journal reported.

Toys R Us filed for bankruptcy in September and recently started clearance sales at about 170 stores that it plans to permanently close in April.

The company has been shedding sales in large part due to growing competition from online retailers like Amazon.

“Brick-and-mortar stores are just getting bludgeoned to death by e-commerce,” Lopez-Castro said. “I don’t think people will miss Toys R Us” if it goes out of business “because everything you can get at Toys R Us, you can get online.”

Click here for the original article.