Toys R Us filed for bankruptcy

Legomancer wrote: The great part is that it was making money, but private equity investors saddled it with a shit ton of debt and then gave themselves a huge payday with it. The actual business of selling toys couldn't wipe out the debt caused by the investors using it to make money for themselves. Hooray for the geniuses of Wall Street!

Welcome to US short term financial capitalism, where the least important thing is a business's ability to make money. Grift on, wall street.

Legomancer wrote: The great part is that it was making money, but private equity investors saddled it with a shit ton of debt and then gave themselves a huge payday with it. The actual business of selling toys couldn't wipe out the debt caused by the investors using it to make money for themselves. Hooray for the geniuses of Wall Street!

Same thing is happening to Sears, and they were Amazon like a century before Amazon.

Legomancer wrote: The great part is that it was making money, but private equity investors saddled it with a shit ton of debt and then gave themselves a huge payday with it. The actual business of selling toys couldn't wipe out the debt caused by the investors using it to make money for themselves. Hooray for the geniuses of Wall Street!

It was either that, or the unsold inventory of NIKITA agents for Heroscape.

Shellhead wrote:

Legomancer wrote: The great part is that it was making money, but private equity investors saddled it with a shit ton of debt and then gave themselves a huge payday with it. The actual business of selling toys couldn't wipe out the debt caused by the investors using it to make money for themselves. Hooray for the geniuses of Wall Street!

Same thing is happening to Sears, and they were Amazon like a century before Amazon.

Ooh, and Guitar Center. They are like a case study in private equity fuckery.

www.nakedcapitalism.com/2014/08/guitar-c...al-growth-curve.html

I'm an accountant but not a fan of unregulated capitalism. The only goal of capitalism is piling up personal profits, and that often results in worse outcomes for society in general. Look at these investors deliberately looting and crashing companies for their own gain, putting so many employees out of work. Conservatives like to pretend that the rich deserve their money because of all the jobs they have created, but it's better for the economy when the middle class is more robust.

An article I read said that they are 5 billion in debt.

Astounding. How do they remain in business like that? I do not see a recovery.

Good toys are the way of the dodo now. Electronics have taken their place.

There is still a market for toys, but Amazon probably dominates that market now.

I bought my first RPG at TRU: Top Secret S/I, ca. 1987. (I wasn't allowed to buy D&D, because Satan, but RPGs generally were fine.)

My brothers and I harangued our dad to buy us Axis & Allies there. He normally had an ironclad policy of "if you ask for it, I won't buy it," on the grounds that it (a) cut down on whiny kids, and (b) kept gifts a fun surprise. For some reason he caved. We played every day for an entire summer.

The last thing I bought there was Battleball. A good game, would've loved it as a kid.

Shellhead wrote: There is still a market for toys, but Amazon probably dominates that market now.

I agree there is a market for toys, but where are they? Because when i walk into a store, I'm amazed kids want toys at all with the crap being offered outside of Lego's.

The best is all of the "blind bag"/"blind box" junk. It is literally the kind of crap you used to would get out of a 50 cent "premium" gum ball machine...but priced at $8.

Most new toys are just really chintzy...the quality level is bottom of the barrel. Even Star Wars stuff has gotten really shoddy. Figures and playsets have just gotten inversely shitty while becoming more expensive. Stuff breaks after like two days of play. Transformers today are just garbage aside from the astronomically priced "collectors" line.

Ironically, it's all like starter sets too...you buy the big giant playset and it has ONE figure. Or you have to buy all five lions separately to form the crappy Voltron that is nowhere near as sturdy and heavy as the old Matchbox/Bandai one.

Baby toys are abysmal. Noise boxes with 123/ABC on them to fool people into thinking there is educational value in honking noises and blinking lights

And how about those GIANT 4' tall Dath Vaders/Ninja Turtles/Power Rangers/Ilsa whatever. They do nothing except fill an obligatory gift slot and wait patiently for the trip to Goodwill.

Nerf and Lego are about all that's really good these days. My kids really don't ask for many toys outside of that. River is more interested in Gundam and Harry Potter. He did ask for some Lord of the Rings figures, so I just had to go into the basement for those. Scarlett is REALLY into stuffed animals and now, terrifyingly, American Girl dolls. Which are PHENOMENALLY overpriced and sold in a way that had me checking to see if they were a subsidiary of Games Workshop. But they are are least very high quality....made in China.

Toys these days are shit. There is no continuity of scale or quality. My nephews all have six or seven versions of Batman and Spiderman. Most break easily as Michael mentioned but the biggest sin is that it is just imposdible to play with them all. Oh look there is a 4" stubby Darth vader with fists bigger than his head and only the arms move. Leys get him with the skinny Batman with a rocket launcher fused to his body. Don't worry, here comes Spiderman with a giant egg head sporting a Chicago Bulls jersey on his Spidey Submarine.

The expensive playsets are all designed to use the one figure that it comes with and maybe two extra packs and done. Next set is a different scale etc..

I busted out my 35 year old lego sets...full of those space guys with the broken helmet from the lego movie, gave the whole box to some of my nephews and everything has use, fitting seamlessly. It's just a pity that you need to finance lego now.

Oh yeah I forgot. Toys r us can go fuck off. Something new and better will show up.

A decent FT article on the role of private equity in the downfall of Toys R US, which seemed inevitable anyway. The only solution to the internet in their minds was international growth.
www.instapaper.com/read/957426371

the losses to the firms and their investors are mitigated by the fact the buyout firms have paid themselves over $200m in expenses, advisory and management fees, according to SEC filings over 12 years of ownership.

the blame is perhaps to be placed most squarely on its private equity ownership. Toys R Us has spent more than $250m a year servicing $5bn in long term debt, which was “not a sustainable situation,” one investor said, as the company faced increasingly crushing competition from Amazon and Walmart.

That debt servicing took place over what--ten years?

The article notes that one of the funds which invested in TrU had an internal memo to investors touting a 16.4 percent return.

Holy Moly. If my IRA had been getting that kind of traction since 2009 and if I had that as a guaranteed return, I'd be able to retire. I'd wait until the end of the school year as a courtesy. Oh wait, I've got kids. But still, I'd be getting 80 percent of my current income.

KKR’s investment came from its KKR Millennium Fund, which was raised in 2002, according to a 2010 filing Toys R Us made with the SEC during an aborted effort to float the company. The Millennium fund reported an internal rate of return to investors of 16.4 per cent, according to the Oregon Public Employees Retirement Fund, a long-time investor in KKR.

My wife has a tiny bit of money in the Oregon fund from her days as a social worker in Portland. It has been doing really well compared to my Fidelity mutual fund, which has been flat for years.

That is all.

Michael Barnes wrote: The best is all of the "blind bag"/"blind box" junk. It is literally the kind of crap you used to would get out of a 50 cent "premium" gum ball machine...but priced at $8.

Most new toys are just really chintzy...the quality level is bottom of the barrel. Even Star Wars stuff has gotten really shoddy. Figures and playsets have just gotten inversely shitty while becoming more expensive. Stuff breaks after like two days of play. Transformers today are just garbage aside from the astronomically priced "collectors" line.

Ironically, it's all like starter sets too...you buy the big giant playset and it has ONE figure. Or you have to buy all five lions separately to form the crappy Voltron that is nowhere near as sturdy and heavy as the old Matchbox/Bandai one.

Baby toys are abysmal. Noise boxes with 123/ABC on them to fool people into thinking there is educational value in honking noises and blinking lights

And how about those GIANT 4' tall Dath Vaders/Ninja Turtles/Power Rangers/Ilsa whatever. They do nothing except fill an obligatory gift slot and wait patiently for the trip to Goodwill.

Nerf and Lego are about all that's really good these days. My kids really don't ask for many toys outside of that. River is more interested in Gundam and Harry Potter. He did ask for some Lord of the Rings figures, so I just had to go into the basement for those. Scarlett is REALLY into stuffed animals and now, terrifyingly, American Girl dolls. Which are PHENOMENALLY overpriced and sold in a way that had me checking to see if they were a subsidiary of Games Workshop. But they are are least very high quality....made in China.

My wife grew up loving American Girl dolls so of course our kid is thrust into that. My first trip to Chicago involved the American Girl doll store (we have in St. Louis now) and I thought I was in an episode of the twilight zone.

My daughter loves Barbies and Shopkins, plus that blind bag crap.

On Toys:
My son never really got into action figures the way I did as a kid. To be honest, I'm very cool with that. I feel my generation has done the following a disservice in this area. When I was a kid my father's toys weren't on the shelf. Today, some 30 years on the shelves are still hanging TMNT, Transformers, Star Wars, Marvel/DC, etc...same old crap. There seems to either be so little imagination and risk in this arena or Generation X just couldn't let go...and with the amount of toy/comic/cartoon stuff marketed to adults I'm guessing the latter.

My daughter does like toys and fortunately girl toys seemed to have fared slightly better. Ever After High, Shopkins, strong female Disney leads...there seems to be new brands here at the least. (though the features of the dolls haven't changed, that's for sure).

So by and large, toys...eh. Not much doing.

On ToysRUs:
Like most I have some fond memories of getting NES games by taking the card up front, or rushing to the GI Joe aisle to get the latest generation of figs. Much like missing the days of flipping through D&D books at a Waldenbooks or checking out games at a Kay*Bee Toys in the mall...this too shall pass to nothing more than a memory. It's been coming though. For decades, ToysRUs has been the equivalent to the outdoor/baby/electronic/kid clothes/toy sections of Target under a different roof. Hell, my kids would just as soon go to Target.