Monday, May 14, 2018 marked the end for many employees working at the Toys “R” Us Global Resource Center in Wayne, New Jersey. While “several hundred” staffers are said to have stayed on as the wind-down of the U.S. businesses continues, there’s the “highly unusual” early exit of many top executives, including Chairman and CEO David A. Brandon. “Unusual” seems to be the key word as this story just gets weirder… could former CEO Jerry Storch want back in on the Toys “R” Us action?
Three separate sources have told me that Gerald L. Storch, former Chairman and CEO of Toys “R” Us from 2006-2013 was at TRU HQ yesterday. Jerry, who now heads up Storch Advisors, has been watching developments at Toys “R” Us for quite awhile, telling CNBC back in December that “Toys ‘R’ Us will survive in a different form,” noting that real investment in both internet and brick-and-mortar would be key. Storch was the first CEO placed after the leveraged buyout by Bain Capital, Kohlberg Kravis Roberts & Co (KKR) and Vornado Realty Trust. There’s some definite dots to be connected, and with a resume that includes leadership roles at Target and Hudson’s Bay in addition to Toys “R” Us, there’s no doubt that Storch understands the retail side of things. When he stepped down in 2013, he was praised for “delivering some of the best financial results in the 60-year history of the company.” He was also there to oversee the acquisition of the FAO Schwarz and KB Toys assets. Could he be the key to a rebirth?
Elsewhere, Reuters broke the news this morning that the Toys “R” Us IP assets will be up for sale next month (which I previously predicted here), meaning that someone will eventually become the owner of the Toys “R” Us name (sans the company baggage) along with other intellectual property like Geoffrey the Giraffe (hopefully Gigi and Baby Gee, too!) and hundreds of domain names – including some “naughty” look-a-likes. As we’ve seen in other endeavors, the “R Us” is a powerful thing that can be applied to many industries.
At store level, the previously-announced “selfie banners” (in two sizes, kids and grownups) have arrived, another ridiculous waste of money as liquidators hope to lure in customers for a picture with a picture of Geoffrey after stores were instructed to send their giraffe costumes back to their local distribution centers. As DCs finally start to empty out and shut down, many Toys “R” Us and Babies “R” Us locations are overflowing with merchandise… but not all of it is actually from Toys “R” Us, nor is it necessarily toys or baby products.
As I mentioned a few weeks back, liquidators have been allowed to bring in “augmented” merchandise – items that they’ve purchased at closeout and are looking to blow out quickly. When the first shipments arrived, stores were getting dollar store-level pots and pans and household items, and now all bets are off on what stores will be receiving. In the past week, I’ve received reports (and photos) of metal handles for screen doors, mesh tote bags and purses, Americana-themed t-shirts (promoted on TRU socials as a “Mother’s Day gift idea”), items marked with logos for stores like Five Below, unsold QVC stock, off-brand toys and games, plus a ton of apparel items and other assorted “garbage.” If you ever wanted the experience of a flea market inside a Toys “R” Us, that just might be possible.
Finally, our family took a drive this past weekend and while visiting my mom for Mother’s Day, I had a chance to pay a visit to my childhood Toys “R” Us while en route to pick up dinner. Matteson, Illinois might be the best/worst example of the “retail apocalypse” anywhere in the country. Honestly, I’m surprised that the Toys “R” Us was able to survive as long as it did – a store that for at least 40 years stood proudly alongside Lincoln Highway. If anything, it outlasted almost everything else, as most of the town is a retail graveyard. There’s an empty Walmart next to an empty Sam’s Club next to an empty Target which is across the street from a second empty Target that was just built in 2007. Lincoln Mall was completely torn down except for one anchor – Carson Pirie Scott, which has now closed as part of the Bon-Ton Stores bankruptcy. Down the street there’s an empty Kmart, several abandoned grocers, an empty Best Buy, empty Taco Bell. There’s even a few shops that I don’t believe have been occupied since Service Merchandise and WoolCo existed… so we’re talking a long time.
The Matteson Toys “R” Us was an eerie place. It closed at the end of March, yet it seems the whole crew just up and left at some point. All of the interior lights were still on, the security camera and monitor at the front door still functioning. Cart corrals barricaded the doors, but inside it was a clear look at piles of debris, plenty of fixtures, a pallet jack and other misc. items tossed around. Looking closer, you can see straight through to the “back of house,” It’s sad on multiple levels, but for me it’s knowing that this is where my mom used to shop for my daughters… and it’s the store I grew up dreaming of as a kid in the early 80s. I still remember the original layout.
Sadly, the Toys “R” Us saga is far from over, and I will continue covering it until the very end.
New Here? Related Stories that You Need to Read:
- Toys “R” Us Workers Meet with Senator Bernie Sanders and March Against Private Equity as the Legacy of Geoffrey is Further Tarnished…
- Toys “R” Us CEO David Brandon Responds to Critics; Some Store Employees Get Bonuses; More Allege “Sabotage”
- Dark Days in Toyland: Toys “R” Us is Officially Liquidating – Court Approval Granted as Mass Fallout Begins
- Toys “R” Us Has a Stalking Horse Bidder for Canada as US Wind-Down Continues
- It’s Official: Isaac Larian Has Submitted His Bid to Purchase Toys “R” Us, plus other updates from Geoffrey’s House…
- Dan Rather: “Here’s What they Didn’t Tell You About the Toys ‘R’ Us Closings… and How it Ties Back to President Trump”
- Toys “R” Us Fallout Update: As Stores Close, Toys For Tots, other Charities Lose; Crayola, Funko and Others Cry Foul…
- Isaac Larian & Friends Have Officially Launched a Crowdfunding Campaign to #SaveToysRUs
- Toy Killer: It’s Bain Capital Positioning Toys “R” Us to Be a Repeat of KB Toys?
- The Future of Toys “R” Us – What News Will Thursday Hold?
- Strategic Marks Plots Return of KB Toys in the Wake of Toys “R” Us…
- Toys “R” Us Set to Close 180 Stores – Eight Illinois Locations on the List
- It’s Official: Toys “R” Us Has Filed for Chapter 11 Bankruptcy Protection