Toys ‘R’ Us once promised that they would not close anymore stores across the United States. Looks like that promise is out the window.
CEO Dave Brandon even went as far as to say that not only were they going to keep their remaining stores open but that they were going to open even more stores across several cities and were even thinking about extending their lease on perhaps their most pricey location in Times Square.
Then reality set in and true intentions were revealed.
After some terrible holiday sales, they have decided to close at least 100 stores across the country. There are even talks floating around that 200 stores will be closing. That is 200 stores of their current 900 stores that they have located in various cities in the country,
This is coming in the wake of their 15 percent decrease from the previous as opposed to the boom that other retailers have seen during the holiday times.
“Final decisions about our real estate portfolio will be done only after careful consideration about the best interests of our business,” spokeswoman Amy von Walter told Bloomberg. “Any speculation on that figure is premature and likely to be inaccurate.”
The repercussions of this is going to affect more than just the thousands of employees that will be out of work. It will also affect the suppliers that rely on the retail giant to stock their products for purchase. Mattel and Hasbro have already taken a hit when Toys filed for bankrupsy in September. Mattel took as much as a 4.5 percent hit on their stock with Hasbro not far behind with a 3.2 percent drop.
Both suppliers have blamed Toys for the hit that both of their companies have taken.
It is getting harder and harder to compete with the convenience of places like Amazon. Toys ‘R’ Us is looking at shutting down even more stores in the near future.
Toys ‘R’ Us has been struggling since their buyout that took place all the way back in 2005.
Retailers like Toys ‘R’ Us rely on the holiday sales to make up for any lack of sales throughout the year. The Wall Street Journal reported that the holiday time actually totaled for about 40 percent of their $11.5 Billion in sales.
They obviously cannot afford to let the holiday sales to dip so low. It could be the end of an era.