So long Toys R Us, my old friend

As many of you may already know, Toys R Us is finally closing down for good. While this post is outside the normal scope of this blog, it’s also relevant in so many ways, because it illustrates not just an upheaval in the retail landscape that has been brewing for some time, but also how failure to respond to those kind of tectonic shifts in market trends, consumer demand, fiscal realities, and not exploiting the second most enviable on-line presence can tank a company like Toys R Us. Even now, it still has enough market presence that the closings will have significant upstream and downstream impacts.

More than that, I used to work there many moons ago. I loved it, so this has a powerful personal angle for me.

And they sold games. Rows of glorious games.

I first started working at the Sunnyvale, California Toys R Us back around, what, 1988 or so, in the stockroom, and the header image for this post is the front of the very store where I used to work (added bonus: It was haunted!). My secret plan was to eventually get to the game cage in the front of the store – those of you who have been around for a while may remember that cage, but if not, fear not: I’ll take you there in a moment, but when I started I worked in the stock room in back, and even there I loved it. It was a two-story, seemingly endless room with rows and rows and stacks and stacks of boxes; big items on the top floor and smaller boxes filled with merchandise to be put on shelves on the bottom. And when someone would order something big, like a plastic above-ground pool or a bike or a swingset or something, they would have to drive around the building to receiving, and we would pull the box from stock and put it on a slide – yes, a slide like you’d see in a playground – and send it down to the lower floor, then slide down ourselves and have the customer take it to their car.

We’d also unload the semis that pulled in, filled to the top with boxes in a not-at-all organized manner. The boxes were just thrown in haphazardly, not stacked, we’d have a manifest on paper, and we’d have to climb up into the back of the semi, climb to the top of the pile, and start checking off each box on the manifest, and throw it out of the truck on to the landing, where someone else would, or possibly would not, take it back to the stockroom. And those semis are BIG; they could have hundreds and hundreds of boxes. We never knew what we would get, it was completely random, and it was great. Good times. I saw on Google maps the semis still pull up to the back like always, I just hope now they have at least somewhat automated the progress, although I guess it doesn’t matter anymore.

Just like old times

Just like old times

After a while, I was moved out to bikes, then for some reason to baby stuff which was, surprisingly, still pretty fun – all the excited new parents made it enjoyable (crib recalls were *not* enjoyable, though), and then, I started getting asked to man the game cage.

Finally, I had arrived.

You see, in the 8-bit and 16-bit eras, and even into the 32-bit eras, games were simply represented by their covers in the game aisle. There would be a card that had a picture of the front of the box and the back of the box, and underneath each card were slips of paper with the name of the game and the price printed on them; it’s very similar to how Office Depot does furniture sales now, if you’ve ever seen those. Anyway, if you wanted a particular game, you would take the paper up to the register, pay, and they would give you a ticket you would take to a small booth at the front of the store, and inside that booth was nothing but games. Games everywhere. So many games! You’d give the ticket to the person in the booth, often me, and they’d give you your game. For me, it was a paradise being in there, seeing all the games that were available, reading the boxes and looking at screenshots, getting the excited kids – and sometimes adults – their games, even keeping it clean and organized was a joy. At that time in my life, there was nowhere else I would ever rather be. As I started school on the east coast, I would occasionally work over the summer, but eventually I had to dedicate more time to school and life, including summers, but I never forgot how much fun that job was at Toys R Us.

Also, I looked high and low for a picture of the game cage, but amazingly, I could not find a single one. I did find a couple of the game isles with their paper tags, though, although I’m surprised that even they are hard to find. If anyone out there,anyone reading this has any pictures of TRU game cage, please send it/them along – even Reddit couldn’t help!

Sega Genesis games in Toys R Us, circa 1990

Sega Genesis games in Toys R Us, circa 1990

I suspected something was wrong all the way back around 2001 or so, when the stores were redesigned to be more ‘playful’ and less like narrow grocery-store isles, only taller. I don’t recall anyone have much of an issue with it, but I suspected that it was a response to ‘something;’ you don’t embark on a complete redesign of an iconic store without being motivated to do so. Later I learned it was because of slagging sales, something that has plagued the chain for a very long time. They tried again in 2015, and we all see where that went.

It took them clear until 2017 to realize the importance of a well-designed, functional, aesthetic website, yet this is also a result of an epic, colossal screw-up on their part many years earlier. See, when Toys R Us first developed their online presence, they did so by partnering with -wait for it – Amazon, all the way back in 2000! That’s when the Internet was still in its fledgling stages, although to the point that e-commerce was starting to take off. If Toys R Us had taken a different path, they could have ridden a wave that saw Amazon become the behemoth, retail landscape-shifting e-commerce megacompany it is today, so much so that Jeff Bezos is now the richest man in HISTORY.

But no, they screwed up, and screwed up big. Instead of leveraging their partnership, in 2006 they sued to get out of their agreement with Amazon in  2006 by saying Amazon breached the terms by allowing other vendors to sell toys as well, which prompted Amazon to countersue claiming TRU didn’t fulfill its obligations and left many orders unfulfilled. It ended badly for Amazon at that time, but it foreshadowed a bad ending for TRU in the future. My guess is they wanted to create their own online presence, although Amazon was, even then, generally king of the hill for this kind of thing, and TRU never did get it right. Other companies had partnered with Amazon as well then broken away, TRU was not the only one, but those other companies, such as Circuit City, well, we see where they are now. Not that leaving Amazon was the sole cause of their demise, but they could have utilized those partnerships much better than they did.

There was also Bain Capital. Yes, Mitt Romney’s Bain Capital. In 2005, they made a leveraged buyout of TRU, shifting all assets to a holding company. The problem is, the toy market has always had narrow margins, and with a leveraged buyout using the assets of the bought out company to leverage (hence the name) the huge loan that is used for the buyout, the assets themselves need to be worth something. Toys aren’t a good asset group in that in that way, and it ended up dumping an enormous amount of debt on top of the company, about $5 billion, and I would have thought anyone could see that would never work out. With $400,000 annual payments towards that loan, they were crushed form the get go. Ironically, or more saddening and angrily, it was Bain Capital that also bought out KB Toys, only to force them to sell thanks to crushing debt as well, and who did they sell to? Toys R Us! Those two aren’t the only ones Bain has impacted, either. Although in fairness, Bain has also had many successes; they wouldn’t exist otherwise. It’s just that these hit close to home for me.

Even so, none of it would have been necessary if Toys R Us hadn’t been mismanaged to this point. To me, they are the Sears of toy stores. Grossly overpriced, absolutely not competitive in any way, worrying on store design instead of competitiveness, yet also haveing been, at one point, the trend setter (remember the Sears catalog?). They couldn’t see the forest for the trees, and focused on the wrong things at the wrong time, allowing competition to blindside them. What could one expect when they bring in the former head of F.A.O. Schwarz, the most expensive toy store to ever exist, to turn things around? Oh right, TRU bought F.A.O. Schwarz in 2009, along with KB Toys, then closed it down. Oh the irony. I think the writing was on the wall a while ago.

Many people online are lamenting the closure of TRU, however it seems many of them never actually went to TRU, but they don’t want it to close either because of overpowering nostalgia. That’s me; I haven’t actually been inside a TRU in years, and the last time I went it was quiet, a little dirty, the people working there seemed like they wanted to be somewhere else, I didn’t find anything of interest, I usually just went to the Target across the street. But I can understand how these people feel, I of all people can understand, and it has also hit me hard, perhaps harder than those who went there as customers. I loved it there, I could tell so many stories, from both the employee and customer perspective, and I am very sad to see it go.

Going Up