Well, Toys Rn’t Us any more. The company’s announcement that it will close or sell more than 700 stores across the country is a commentary on today’s American shopping habits and how retailers are coping – or not.
The toy giant, one of Santa’s favorite outlets, just hasn’t been able to compete with online buying. Its more than 30,000 employees are joining the ranks of the unemployed.
Because Toys R Us filled such a special niche in the market, many families are watching its demise with heavy hearts. Buying toys, they say, is different. They and their kiddies want to touch and test out the products before buying. The end of the toy store will mean the end of a special experience for the children who were treated to regular trips to see the goodies. But the likelihood is that most of these families will join the march to online shopping.
But in the retail market, where survival of the fittest rules, the Toys R Us closing will have its effect on other major outlets.
The companies that make toys and games are likely to feel the difference. Toys R Us has served as a test ground or “incubator” for new toys. Hasbro and Mattel, who have stood at the apex of toy-making for years, will feel the pinch and then likely increase their use of major retailers such as Walmart, Target and Amazon. Toys R Us has accounted for 11 percent of Mattel sales in recent years, and about 9 percent for Hasbro’s sales.
Experts in the toy market predict that smaller toy companies will have a hard time because Toys R Us accounted for up to 40 percent of their sales, in some instances. The Walmart and Target stores have less space to display toys and may offer fewer of the toys produced by the smaller companies. Hasbro and Mattel may look at creating smaller toys to survive in the new marketing schemes.
The large malls where the toy company has tended to settle its stores will find themselves with big blanks to fill. Some of them have watched the Toys R Us struggle and have been looking for new tenants already.
Not everyone is assuming that Toys R Us is down for the count. Some retailers that appeared dead have created new incarnations for themselves. Consider American Apparel, which declared bankruptcy and closed its stores last year. It was revived by another company and is enjoying a second life as an online-only clothing store.
Jeffery, Toys R Us’ long-necked giraffe spokes-animal, could find new ways to sell his wares. There will always be a market for toys.