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Toys R Us bankruptcy auction canceled, brand set for revival

SpongeBobfan1987

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Toys R Us bankruptcy auction canceled, brand set for revival The IP was simply too valuable to give up
By Julia Alexander, Polygon

Oct 2, 2018, 5:51pm EDT


Toys R Us will live to see another day, as its controlling lenders choose to pull out of the bankruptcy auction.
The Wall Street Journal reports that Toys R Us’ controlling lenders “intend to revive the business behind the Toys ‘R’ Us and Babies ‘R’ Us brand names.” The goal is to “create new, domestic, retail operating businesses” while maintaining its licensing of certain products worldwide, according to court documents filed Monday, as reported by the Journal. The company’s lenders decided to reverse the order after speaking to controlling parties and deciding the brand was too valuable to give up.
Toys R Us representatives first announced that the company was filing for bankruptcy protection in September 2017. Dave Brandon, CEO and chairman of Toys R Us, addressed concerns about the company’s financial future at that time in a statement. That statement can be read below.

Our objective is to work with our debtholders and other creditors to restructure the $5 billion of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business, continue to improve the customer experience in our physical stores and online, and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide.
Since then, Toys R Us closed and sold all 735 remaining stores in the United States and ended sales on its website. The Wall Street Journal also reported that “the absence of Toys ‘R’ Us has also left an $11 billion hole in the toy industry.”
Polygon has reached out to Toys R Us for more information.
 

MY CHOCOLATE LEG!

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I mean, my nostalgia says yes but my brain says no. They filed bankruptcy for a reason—online retail. How exactly are they going to solve that?
 
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MY CHOCOLATE LEG! said:
I mean, my nostalgia says yes but my brain says no. They filed bankruptcy for a reason—online retail. How exactly are they going to solve that?
Good point. Maybe it will be good at first though, people might be excited that it's reopening and buy a lot of stuff online.
 

SpongeBobfan1987

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This was a surprise to me as well. I hope they start with a clean slate free of debt, both as an online and brick-and-mortar presence (Of course, they'll have to start from scratch!). I'm so excited for next year. What a way to end this decade of ups and downs!

I hope they open smaller stores inside many different class A or class B shopping malls in the United States, including those owned by Simon Property Group, Westfield Group, or General Growth Properties.
Maybe they could possibly open a store inside of the Phase II expansion of the Mall of America in Minnesota as well as the American Dreams Meadowlands shopping mall, currently under construction in New Jersey.

I hope they make the stores have all kinds of fun, interactive things for the kids to do, while their parents do some shopping on Black Friday or any other day of the year for that matter.
 
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SpongeBobfan1987 said:
I hope they make the stores have all kinds of fun, interactive things for the kids to do, while their parents do some shopping on Black Friday or any other day of the year for that matter.
Wasn't that the case before the stores shut down?
 

crushingmayhem

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I always liked going to Toys R Us as a kid, i even bought games and toys there back then. To me this sounds like good news to people who liked buying there.
 

SpongeBobfan1987

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Apparently, Isaac Larian is no longer planning to sell his toys to Toys "R" Us. The revived chain is now going to be "dead to him."
Isaac Larian, owner of Little Tikes and MGA Entertainment wanted to save the ailing Toys "R" Us chain a few months ago, but he could not afford to.

If I were one of the owners of the Toys "R" Us brands, I'd pay off all remaining debts, then sell the Toys "R" Us brands to a more reputable buyer, like Sun Capital Partners, the current owners of the Shopko discount store chain.

I don't want the same mistakes to happen this time which plagued them the last time, where they let venture capitalists like KKR Investments, Vornado, and Bain Capital ruin the company by burying them in debt.
 
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