One reason Toys R Us failed is more serious than you may think

One reason Toys R Us failed is more serious than you may think March 16, 2018

An analysis from The Washington Post:

There are endless reasons a big-box toy store would collapse during a retail apocalypse — and Toys R Us acknowledged a number of them in its most recent annual filing: the teetering tower of debt incurred by its private-equity owners, competition from Amazon, Walmart and Target.

They even wrung their hands about app stores, labor costs and potential tariffs raising the costs of the imported goods they sell.

But one risk stood out. Toys R Us said there just weren’t enough babies (emphasis ours):

The decrease of birthrates in countries where we operate could negatively affect our business. Most of our end-customers are newborns and children and, as a result, our revenue are dependent on the birthrates in countries where we operate. In recent years, many countries’ birthrates have dropped or stagnated as their population ages, and education and income levels increase. A continued and significant decline in the number of newborns and children in these countries could have a material adverse effect on our operating results.

It may not have been the biggest existential threat confronting Geoffrey the Giraffe (the store’s mascot), but it’s the one with the broadest implications outside of the worlds of toys and malls.

Read more.


Browse Our Archives

Follow Us!