After announcing the closure of all 735 stores, Toys ‘R’ Us has started liquidating its inventory nationwide. In San Diego, the shelves were nearly picked clean, as shoppers took advantage of the savings.
The bankrupt retailer is liquidating $2 billion in inventory.
All Toys ‘R’ Us and Babies R Us stores will be closing, and all stores are offering deep discounts on purchases.
The retailer declared bankruptcy in September, with $5 billion in debt left from its leveraged buyout by investors Bain Capital, KKR and Vornado Realty Trust. The company was hoping for strong holiday sales, but that never materialized.
Two days after liquidation began, toy shelves in many stores were bare.
Overseas, the company is pursuing a reorganization and searching for potential buyers to take over stores in Central Europe, Canada and Asia.
In the UK, the company fought for protection from debtors for its 105 stores. More than 3,000 workers are expected to lose their jobs.
More than 33,000 people in the United States stand to lose their jobs as Toys ‘R’ Us shuts its doors.
The toy retailer is the latest victim of what experts are calling the “retail apocalypse,” as online shopping takes precedence over brick and mortar stores. Credit Suisse believes that one-quarter of America’s shopping malls will be out of business by 2022.
Toys ‘R’ Us has yet to announce when its liquidation sales will end, but they won’t accept coupons, have stopped redeeming reward points and have set April 21 as the deadline for using gift cards.
Customers can still shop online for a limited time. Those with layaway accounts have been urged to pay the remainder of their balances and retrieve their products, or to seek refunds on deposits.
Just a week after the company announced the closure of its stores, the founder of Toys ‘R’ Us, Charles Lazarus, died. The 94-year-old, who no longer had a stake in the company, founded the toy store in 1948 at the age of 25. Lazarus opened the store in anticipation of the need for baby toys and supplies during the post-war baby boom.
Lazarus remained as CEO until 1994.
“There have been many sad moments for Toys ‘R’ Us in recent weeks, and none more heartbreaking than today’s news about the passing of our beloved founder,” the company said in a statement. “He visited us in New Jersey just last year, and we will forever be grateful for his positive energy, passion for the customer and love for children everywhere. Our thoughts and prayers are with Charles’ family and loved ones.”
In 1957, Lazarus opened his first store stocked only with toys. The store was modeled after a supermarket, with shelves piled high with toys.
The company went public in the 1970s, and grew from $1 billion to $11 billion in the early 1990s.
Eventually, the toy store would face challenges due to increased competition from big box stores like Target and Walmart.
In 2006, the company was sold to a group of private equity firms for $6.6 billion. The sale left the retailer with $5.3 billion in debt that it never recovered from.