Wednesday, May 09 2018 16:16

Toys "R" Us Workers Meet with Senator Bernie Sanders and March Against Private Equity as the Legacy of Geoffrey is Further Tarnished...

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As the final wind-down of U.S. operations for Toys "R" Us continues, it should be crystal clear by now that saving the business and its 33,000+ workers was just not a real priority. If it was, the company and its lenders and ownership would've found some way to make it happen, but we knew as early as the beginning of February that Bain Capital was pushing for a full liquidation - and that's exactly what they got. The private equity industry is a scummy bunch, and when it comes to representation, that's even clear in their own lobbying organization, the American Investment Council, which softened its name over the years from the more ominous "Private Equity Growth Capital Council" and "Private Equity Council" to become the AIC. While these groups have powerful representation, it's the American worker that gets caught in the crossfire during leveraged buyouts and their eventual collapse, and in retail this is a group who is typically under-represented (I do not believe that Unions are the answer, but that's a lengthier story for another time). Retail workers - both hourly and salaried management included - are generally underpaid and lack any long-term benefits. In a situation like what's happened with Toys "R" Us, you have the people who've been doing the real work - the ones out there on the front lines - facing unemployment with no severance as they have to deal with the general public and the sad position of closing up shop. Meanwhile, you have Chairman, CEO and LinkedIn Enthusiast David A. Brandon still kicking around the increasingly ghostly halls of Toys "R" Us HQ in Wayne, NJ, having to ride things out until the very end as part of the terms of the $2.8M retention bonus he took in September of 2017, just days prior to the company filing bankruptcy. Today, a group of Toys "R" Us employees met with Senator Bernie Sanders in Washington D.C., later marching alongside representatives from The Center for Popular Democracy and Rise Up Retail as they took to the AIC in protest of private equity destruction at the hands of Bain Captial, Kohlberg Kravis Roberts and Vornado Realty Trust. Watch the video below...

As previously reported, stores were instructed to return their walkaround Geoffrey the Giraffe costumes last month, though no definitive reason was given. Many thought it was in response to a suit that was being sold on eBay, though other costumes had already been sold to members of the public during the liquidation process. There has been speculation that these costumes were being sent back to be destroyed - something that picked up steam after an image of a Geoffrey costume in a dumpster behind TRU HQ began making the rounds...

Geoffrey in the Dumpster

While there's no emotion on the business end of this liquidation, those involved are certainly making an attempt to lure shoppers by playing the nostalgia angle. Yesterday I received a press release sent on behalf of the liquidation firms (Great American Group, Tiger Capital Group, Gordon Brothers and Hilco Merchant Resources) who are adding insult to injury by inviting customers to come take a picture with a picture of Geoffrey.

From the press release: "Beginning Friday, May 11th stores across the United States are giving loyal shoppers the opportunity to commemorate their final Toys 'R' Us moments with a selfie banner featuring the retailer's iconic mascot Geoffrey. "Toys 'R' Us has been a renowned household name over the years and providing loyal customers the opportunity to commemorate their final moments is a great way to keep the memory of Toys 'R' Us alive. We encourage everyone to capture and share their final experiences on Toys 'R' Us' social media channels using the hashtag #alwaysatrukid"

So the stores were asked to send back their actual Geoffrey costumes, but now money was just spent printing "selfie banners" for a celebration of "final moments?" What a bizarre corporate funeral this has become. But hey, they're now hyping up "discounts of up to 30-50%" on $2B worth of inventory, much of which was never paid for in the first place.

Toys "R" Us Nametags

Pictured above: Name badges making the social rounds today.

Bonus Fun Facts: While workers march on Washington in hopes of gaining a severance that they'll never see, these are the names of the five executive officers who took retention bonuses on the eve of the Toys "R" Us bankruptcy. Approved by the TRU Board of Directors (a crew consisting of reps from Bain Capital, KKR and Vornado Realty Trust), these bonuses were revealed in a 10-Q filed in September 2017, and paid just five days prior to the bankruptcy filing. Their names were withheld in TRU court filings, but were uncovered in an objection filed by a U.S. Trustee.

  • David A. Brandon, CEO ($2,812,500)
  • Michael J. Short, CFO ($600,000)
  • Richard Barry, Executive Vice President – Global Chief Merchandising Officer ($450,000)
  • Lance Wills, Executive Vice President – Global Chief Technology Officer ($412,500)
  • Andre Javes, President – Toys “R” Us, Asia Pacific ($325,125 based on the conversion rate on the date of payment)

While thousands will suffer as a result of actions for which they were not responsible, don't worry about this group - they'll be just fine.

It should also be noted that Brandon is still Chairman of Domino's Pizza, though if Domino's is smart, they'll find a way to remove him from that position before he starts making plans to head back to Michigan (where his name is dirt already) when the dust starts to settle in New Jersey. 33,000 people could eat a lot of pizza, and social rumblings have been pointing toward a post-TRU boycott of the pizza maker should Brandon remain in place. Personally, I don't see Brandon's removal happening in that case, and I certainly don't want to see more lower level workers become collateral damage at another company should such an attack materialize - but thousands of former Toys "R" Us employees taking their pizza business elsewhere could be quite damaging, at least in the short-term. I do believe that Brandon should be seriously considering retirement if he hasn't already. It's time to hang it up, Dave.

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Top Photo Credit: @MakeTheRoadNY via Twitter

James Zahn

James Zahn is best-known as The Rock Father™, a media personality, commentator, adventurer and raconteur. He is the Owner, Publisher, and Editor-in-Chief of THE ROCK FATHER™ Magazine. In January, 2019, after nearly a decade of publishing The Rock Father™ Magazine, he joined Adventure Media and Events as Senior Editor of The Toy Book—the leading trade publication for the toy industry since 1984, as well as The Pop Insider — a destination for all things pop culture, and The Toy Insider — the leading consumer guide for toys and games. He is also editor of The Toy Report, a weekly newsletter published by The Toy Book each Thursday. Zahn has over 27 years of experience in the entertainment, retail and publishing industries.

He regularly serves as a Brand Ambassador and spokesperson for several Globally-recognized pop culture and lifestyle brands in addition to consulting for a number of toy manufacturers. 

Creatively, James has directed/edited music videos, lyric videos, and album trailers for bands such as FEAR FACTORY, has appeared as an actor in feature films and commercials, written comic books, and performed in bands. He currently serves as an artist manager and video director for PRODUCT OF HATE, whose debut album was released by Napalm Records in 2016, distributed by ADA/Warner Music in the U.S. with Universal Music handling global. A new album has been completed and is set for release this year.

Zahn and/or his work have been featured in/on CNN, NBC, ABC, WGN, CBS, GCTN, G4, The Chicago Tribune, Forbes, MarketWatch, Reuters, BusinessWire, Fangoria, Starlog and more. He's appeared as a music expert on CNN's AC360 alongside Anderson Cooper, and has been interviewed by Larry King. In the past he served as a writer for the Netflix Stream Team,  Fandango Family and PBS KIDS, penned articles for Sprout and PopSugar, and was a contributor to Chicago Parent.

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