Toys ‘R’ Us, Once a Category Killer, Is Forced Into Bankruptcy

After falling behind online, the big-box chain seeks relief from debt added in leverage buyout

Full article at WSJ.com

By Lillian Rizzo and Suzanne Kapner

Toys ‘R’ Us Inc., the rainbow-colored toy emporium that for decades was the go-to spot for birthday and holiday gifts, filed for chapter 11 bankruptcy protection late Monday night, undone by a hefty debt load and the rapid shift to online shopping.

As part of the restructuring process, Toys ‘R’ Us plans to close some underperforming stores, according to people familiar with the matter. Its remaining locations would be reconfigured to be more experienced-based, incorporating amenities such as in-store play areas, they added.

The company expects most of its stores will be open for the holidays and it will use $3 billion in bankruptcy financing to continue buying merchandise and funding its operations, the people said.

The company, which operates about 1,600 stores around the world, was a classic example of a “category killer,” a huge specialty store with low prices that squeezed independent shops. It swallowed up several rivals that have themselves filed for bankruptcy protection, including FAO Schwarz and Kay Bee Toys, a mall-based chain that liquidated hundreds of stores before it was sold.

“They are the last major free-standing toy retailer in the U.S.,” said Jim Silver, the chief executive of TTPM, a website that reviews thousands of toys each year for consumers. As the testing ground for new products, Toys ‘R’ Us often identifies hits before rivals, as it did with Zhu Zhu pets in 2009, Mr. Silver said.

But like many other big-box chains, including Borders, Circuit City and Sports Authority, Toys ‘R’ Us struggled with the rise of discounters like Wal-Mart Stores Inc. and TargetCorp. , and more recently, Amazon.com Inc. It was late to develop and expand its e-commerce business and placed big bets on licensed toys for “Star Wars” and Lego movies that missed expectations.

Wait a minute: There Will Be More Retail Stores Opening Than Closing In 2017

Let's look deeper into the type of stores that are opening, and why.

Full Article at Forbes.com

"The fashion-related vacancies you're seeing are dominating the list of store closures. You could blame technology for that, but that wouldn't be entirely fair. It's more fair to say that technology accelerated the decline of retailers who have not been in touch with what their consumers wanted as much as their competitors. Technology helps consumers see more of what's available and that makes the comparison between brands so much more stark and apparent.

How Amazon is Killing Retail

From MarketWatch.com

"At current growth rates, Amazon would have annual revenue of $500 billion in five years. As traditional retailers close stores and dismiss workers, shopping at the mall will make less and less sense.

There’s not much retailers like Macy’s, The Gap GPS, -0.26%  , Best Buy BBY, -0.73%and Barnes & Noble BKS, -0.71%   can do about it. Their business will be much, much smaller."

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Ghostly images of a dead mall tell an American story

November 16, 2016: 1:19 PM ET

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The urban explorer has photographed ruined factories, collapsed apartment buildings, abandoned amusement parks and, especially, "dead malls" that have fallen into ruin. There is no shortage of them in the region he calls home, the Midwest.

"I've always wanted Americans to see what's happening to their country from the comfort of their suburban homes and their smart phones," Lawless, who lives in Cleveland, told CNNMoney. "I want people to see the beginning of the end of the greatest economic machine that the world has ever seen: America."

With each image of yet another mall on the eve of demolition, Lawless adds another piece to his haunting mosaic of America. His latest photo project, snapped just two weeks ago, is of the doomed Metro North Mall in Kansas City, Missouri.

 feels like you're the last person alive," said Lawless, who toured the ruins just as demolition was about to begin. "It's peaceful, but it's also surreal. I thought it was creepy for one major reason. It had a futuristic vibe in a way."

He said that the mall, built in 1976 and shuttered in 2014, featured "bubble lights" that "almost looked like these space ships, with light beaming down."

And even though it had been protected from vandals, he was surprised how quickly the interior had deteriorated.

"That's what really shocked people," he said. "How could it deteriorate so rapidly?"

He said the story of Metro North is more about the change in American society than its economic demise. For one thing, the wrecking ball is sparing the Macy's (M) anchor store. And rather than leaving the ruins to the rats, city developers are rebuilding the site as an open-air shopping center.

Lawless said the area around the mall is thriving with neighboring stores and businesses, and developers believe that shoppers want a retail space open to the elements, not the enclosed mall that used to be hallmark of American society.

"Their communal space is social media," he said. "They don't need to go to a mall where they can walk around, meet with people. There's no need for that large enclosed space."

But many of the other dead malls that Lawless has photographed are casualties of economic malaise in depressed regions of the Rust Belt that were once thriving.

"I've watched it grow. I've watched these large spaces become abandoned, he said. "It's a depressing journey. It's been a sober journey."

He said that people who lived in those areas felt ignored and cut off from the rest of America, which is why many of them voted for Donald Trump for president: They felt he was listening to them.

"The country has definitely changed drastically in parts, and it's an important thing for people to see," Lawless said. "People see [dead malls] as America thriving at one point, and people what that kind of America back."

Lawless' new book, "Autopsy of America: The Death of a Nation," will be published next year.