
Amazon Has Considered Buying Some Toys ‘R’ Us Stores - TwoFactor
https://www.bloomberg.com/news/articles/2018-03-19/amazon-is-said-to-have-mulled-acquiring-some-toys-r-us-stores
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vinhboy
I think Amazon should do it.

I personally believe Toys R Us just missed an opportunity to run a proper
business. They have a ton of retail space, but every time I've been there,
it's run like Walmart. Shit everywhere, no one to help you find anything,
etc...

There's nothing suburban parents like me want more than an indoor play space
for my kid (for extremely hot or cold days). If they properly utilized their
store and made it more like a play space, I would bring my kid there every
weekend.

Right now I am paying money to go to those "kids museum". Why didn't Toys R Us
think to capitalize on that market?

Also, if they had people to playfully demo the toys to my kid, I am pretty
sure we would buy way more toys instead of just leaving frustrated because we
can't find what we wanted.

~~~
jobu
> _I personally believe Toys R Us just missed an opportunity to run a proper
> business._

Toys R Us has been struggling to pay off $6 billion in debt from the Bain
Capital takeover in 2005. They didn't have the capital or the margins to
invest in maintaining their stores, let alone competing with Amazon.

Buying a company with debt and then forcing that company to pay off that debt
is fairly common, but for some reason it surprises me that it's actually
legal. Why isn't Bain forced to pay off the debts when the company goes under?

[https://www.forbes.com/sites/walterloeb/2018/03/19/bain-
capi...](https://www.forbes.com/sites/walterloeb/2018/03/19/bain-capital-sees-
three-investments-stumble-toys-r-us-guitar-center-and-iheartmedia/)

~~~
stupandaus
To answer your question, the debt holders take precedence over the equity
holders like Bain Capital, and generally being an equity holder and having
your equity stake wiped to $0 is not a good outcome for a private equity firm.
Bain does have to pay off debts - that is what the liquidation of assets is
being done for - to pay off debts to the debt holders. Bain doesn't get to
keep those assets.

~~~
Retric
This assumes they occur post bankruptcy. Looting a company involves dept then
dividends from selling off assets to the point a company can't make debt
payments. The money is already gone by the time the company can't pay, so they
don't care what happens to the shell at that point.

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jgh
On the topic of toy stores / toy store innovation, that American Girl doll
store is insane. My wife and I went there to buy a doll for our friend's
daughter for Christmas and holy hell is that place busy / kinda weird. It's
like a Bloomingdale's or something for dolls. Kids can even sign up for "doll
spas" and bring their dolls in to have their hair and nails done and stuff.
Obviously I don't really get it because I'm not an 8 year old girl, nor do I
have any kids but that place must be making a ton of money.

~~~
CodeCube
This is part of the reason that IMO a lot of retail is failing ... customers
don't want or need a static display of inventory; they can easily get that
from their already-installed Amazon app. Retail needs to evolve to be an event
destination ... a place that gives the consumer a _reason_ to get out of the
house and go there. A place where they can experience something other than
just simple consumption.

Obviously, not every single storefront needs to be that (grocery stores come
to mind) ... but for the average mall, no one wants to actually go there and
walk around any more. The mall needs to be a place that entices people to go
there and simply exist ... do stuff, hang out with people, even if they spend
no money at all.

~~~
jpindar
Radio Shack should have tried to evolve into maker spaces rather than cell
phone stores.

~~~
freehunter
The number of times I was working on an electronics product and went to Radio
Shack to try to find a quick replacement for the resistor or motor I just
fried is crazy... and the crazier part is they never once had the part I
needed yet I kept coming back because it's the only store I could think of
that might have it.

Arduino and Rapsberry Pi should have been their saving grace. Not cheap RC
cars.

~~~
km3k
I agree, but they were out of the parts business well before Arduino and
Raspberry Pi were a thing. The last Radio Shack in my area that stocked
resistors closed in 2006. There's none near me now, but since ~2000 they'd
been mostly phone stores that also carried the occasional batteries and
cables.

~~~
s73v3r_
They had gotten kinda back into the parts business within the last ~5 years or
so? At least the ones near me did. They were starting to embrace the maker
movement, and was at least dedicating some space to them.

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bob_theslob646
People are not getting it.

If they are going to get into the business ( acquiring retail space) it will
be one that fits into their equation for their last mile problem and be at
fire sale prices.

If they choose to purchase retail real estate, it will most likely be a
combination of retail/grocery/banking all in one, sort of like a Walmart, but
way better experience.

This most likely will be their approach to get baby boomers to shop and to
learn how to shop online.

As everyone knows, Amazon loves getting things cheaply and will do so if they
can.

> Webvan was an online grocery business that went bankrupt in 2001 after 3
> years of operation and was later folded into Amazon.com.

> CNET named Webvan one of the largest dot-com flops in history

> Webvan placed a $1 billion order with engineering company Bechtel
> Corporation to build its warehouses, and bought a fleet of delivery trucks.

> In 2000, Webvan bought HomeGrocer, a competitor that was also losing money,
> for $1.2 billion in stock.[11][12] At its peak in 2000, Webvan had $178.5
> million in sales but it also had $525.4 million in expenses.

([https://en.wikipedia.org/wiki/Webvan](https://en.wikipedia.org/wiki/Webvan))

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DanCarvajal
I mean there has to be an non-dilapidated Toy 'R' Us location somewhere right?

~~~
mc32
These are. I've been to one. Not a bad store at all. Resurrecting a highly
nostalgic brand may be a viable option, if Amazon has some trick up their
sleeves. The one thing they can't fix is low birth rates though, so it would
have to transform the stores a bit.

~~~
__abc
Whole Foods me.

As a parent, put a craft beer/craft coffee in my hand (mark that up too, I'll
pay) and give my kids and myself an experience, more than just a static
display.

Blicks, a store for art supplies has done this with wine nights, painting
lessons (with wine), etc.

Ignoring all the damn alcohol, it's brands that will compete by creating an
experience that may stand a chance (IMO)

~~~
mc32
Maybe if they combined it with some maker stuff --however, I think perhaps the
maker stuff has a too limited audience. And besides, their locations do not
lend themselves much to drop-ins. Like, while I'm at it buying something at
[some place] I'll drop in at Toys R Us. They tend to be in out of the way
locations.

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empath75
> Additional stores would give Amazon space to showcase its popular Echo line
> of devices, which run on the Alexa voice-activated platform.

I'm pretty sure they're not going to buy a big box retailer to jam a bunch of
echos into it.

~~~
libria
They already have one in Seattle with a large section dedicated to Echos and
Kindles, so it's not without precedent for them.

Now why an ecommerce giant is retrogressing to brick and mortar I can't
imagine.

~~~
CodeCube
It's just an additional sales channel ... if they can have a place where a)
people can go to physically preview inventory, and b) can go to immediately
obtain merchandise when they can't wait for it.

Additionally, it can help to simplify logistics ... if there are more
locations where they person can go pick up their package rather than having to
deliver it, surely that can be a boon to their operations.

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anigbrowl
They should buy all of them, use them as display space for a wide variety of
Stuff, and continue shipping normally except for small items that can be sold
at point of sale and stored at low overhead.

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lph
As a parent of young kids, I've been in to Toys R Us twice in the past few
years. The first time it was really depressing: prime-time hours for retail
and the store was practically empty. The second time was last weekend, and it
was bustling with people hoping for fire sale prices. Probably the best
weekend that store has had in years.

