What is Toys R Us stock price, and are they publicly traded? Unfortunately, investors cannot purchase shares of Toys R Us because it is a private company. However, Walmart (NYSE: WMT) and Amazon (NASDAQ: AMZN) are toy companies that traders can invest in.
Have you wanted to trade Toys R Us? WE delve into the stock story. When did they start? And where are they today? So many things have changed from the 90s to now. And Toys R Us is nostalgic for those who grew up in the nineties.
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Toys R Us Stock Story Introduction
If you were a child in the U.S. (and several other countries) between 1960 and the early 2000s, you were a Toys “Я” Us kid. The toy retailer started in 1948 as Children’s Supermart. They changed their name to Toys “R” Us (TRU) in 1957.
Through the years, TRU became the dominant big-box toy retailer, growing to over 700 TRU U.S. stores, including hundreds of Babies R Us and Kids R Us stores and many TRU stores in countries worldwide. Many kids grew up with the famous song in their heads. In 2017, the company filed for bankruptcy protection. In 2018, it closed all of its U.S. stores. We will describe what happened to TRU and the hope that remains.
Three main forces brought about the end of the Toys R Us stock story.
Walmart
For decades, TRU was a big box retailer with no significant competition. Starting in the early 1990s, Walmart had finally grown to a size that was a true competitor. The toy business has 40% of its revenue between Thanksgiving and New Year’s.
The other 60% mainly comprises two other occasions: birthdays and “you were a good kid” rewards. By the late 90s, the average parent visited TRU 12 times a year and Walmart nearly 48 times yearly.
Because of the convenience, many birthday and reward sales went to Walmart. Additionally, during the six weeks from Thanksgiving, Walmart can shift its floor space. As a result, they increase the size of the toy section.
Finally, because Walmart was not relying solely on toy sales, they could sell some hot products at near cost to drive traffic to the store during Christmas. These combined were a damaging blow to the Giraffe. This is a big part of the Toys R Us stock story.
Amazon
Amazon started its toy sales with a relationship with TRU after a disastrous delivery record by TRU in 1998, where toys did not make it by Christmas. TRU would choose and supply “all toys” for Amazon, who took care of delivery.
The relationship eventually fell apart due to a disagreement that the “all toys” included video games (making up about a third of all toy sales). Amazon wanted to keep this for themselves, while TRU said it was their domain.
The conflict ended the relationship and finally finished with a suit won by TRU. A similar trend to Walmart for online toy sales occurred from about 2008, with Amazon taking many purchases away from TRU through convenience, leading to the retail apocalypse.
By 2010, 25% of the 21 billion dollar toy business was online and growing by about 22% a year, taking more business away from in-store sales, which had near nominal growth.
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Saddled With Debt
In March of 2005, a consortium of three Private Equity (PE) firms announced their takeover of TRU, and shares stopped trading in July. In the following years, TRU did several things to keep it afloat, including staying open 24 hours a day in the days leading up to Christmas, a new concept store called the Toy Lab, and a new, less cluttered layout with interactive exhibits.
However, none were sufficient to pay for the $5 billion in long-term debt the private owners saddled the company with. PE had gotten their investment money out with a hefty profit, leaving the company to fend for itself. 2017, TRU declared bankruptcy, requesting help for the debt it had accumulated in September of 2017, right before Christmas.
With the bankruptcy, they secured an additional 3 billion in debt that allowed them to buy products from toy makers and sell through the new year, but in March of 2018, it was allowed to liquidate the U.S. Stores, and finally, the last U.S. stores were closed in June of 2018. That year’s Christmas season was absent the retailer that made up 4 billion of the business’s sales.
Final Thoughts: Toys R Us Stock
Though gone from the U.S. for a while, Toys Us’s star is beginning to shine again. Macy’s department store has begun to put TRU sections in 400 of their stores, and there are still several TRU stores globally. The name has strong memories for many. And this model may work to keep the Toy’s “Я” Us name alive for a while longer.
If used correctly, being a small section for most of the year and growing to square footage for the holiday season as Walmart does, Macy’s may have enough success to at least put off its demise for a while longer. The toy manufacturers like to have TRU still in play because it allows kids to see the products in a way that online sales can not currently provide. Only time will tell if the newest version of the Gerafe will succeed.
