Toys R Us, hobbled by competition, will shutter 180 stores

Stores in Iowa, Minnesota will be closing

Posted: Jan 24, 2018 11:32 AM

NEW YORK (AP) — Toys R Us, squeezed by Amazon.com and huge chains like Walmart, will close 180 stores, or about 20 percent of its U.S. locations, within months.

Hobbled by $5 billion in debt, the company that once dominated toy sales in the U.S. filed for bankruptcy protection in September.

Chairman and CEO Dave Brandon said in a letter Wednesday that tough decisions are required to save Toys R Us.

Toys R Us operates about 900 stores in the U.S.

Here are the stores closing in Iowa and Minnesota:

Iowa

S. Des Moines 1211 E. Army Post Rd. IA

Des Moines 8801 University Ave IA

Minnesota

Minnetonka 14100 Wayzata Blvd. MN

Blaine 170 89th Ave. MN

Woodbury 8236 Tamarack Village MN

Richfield 900 West 78th Street South MN
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The store closings will begin in February and the majority of the targeted locations will go dark by mid-April. At some other locations, the retailer is combining its Toys R Us and Babies R Us stores.

Toys R Us, based in Wayne, New Jersey, has struggled with debt since private-equity firms Bain Capital, KKR & Co. and Vornado Realty Trust took it private in a $6.6 billion leveraged buyout in 2005. The plan had been to take the company public again, but weak sales have prevented that from happening. With such debt levels, Toys R Us has not had the financial flexibility to invest in its business.

While its numbers have been shrinking, Toys R Us still sells about 20 percent of the toys bought in the U.S. according to Stephanie Wissink, an analyst at Jefferies LLC.

Competitive pressures will force the company to take a close look at all of its stores, and more will likely be shuttered over the next year or two, Wissink said.

Toys R Us reigned supreme in the 1980s and early 1990s, when it was one of the first of the "category killers" — a store totally devoted to one thing: toys. Its scale gave it leverage with toy sellers and it disrupted general merchandise stores and mom-and-pop shops.

Now Toys R Us and other category killers like the now-defunct Sports Authority, Borders and Circuit City, are being upended by a new force: Amazon.com.

GlobalData Retail estimates that about 13.7 percent of toy sales were made online in 2016, up from 6.5 percent five years ago.

Toys R Us has been hurt by a shift to mobile devices as well, which take up more and more play time.

About three dozen retailers sought bankruptcy protection last year due in large part to a radical shift in consumer behavior, both in where they shop, and what they buy.

Toys R Us closed its flagship store in Manhattan's Times Square, a huge tourist destination, about two years ago.

The struggles of Toys R Us have rippled outward and rumors continue to swirl around the possibility of a merger between Mattel and Hasbro, the nation's largest toy makers.

Wissink estimates that Toys R Us accounts for about 11 percent of Mattel's annual sales and about 9 percent of Hasbro's annual volume. Shares of both Mattel Inc. and Hasbro Inc. slipped in early trading.

"(Toys R Us) store closings will reduce rent expense and allow the company to focus all of its operating efforts on only its best locations," said Moody's lead retail analyst Charlie O'Shea in a report published Wednesday.

Brandon said Wednesday that the company made some missteps during the critical holiday shopping season.

"As the leader of this company, I want you to know that we can and will address the gaps in the experience that you may have had when shopping this holiday," Brandon said. "My team is already hard at work to make the improvements necessary to ensure that we have the products you want, when, where and how you want them."

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 485230

Reported Deaths: 6554
CountyCasesDeaths
Hennepin1006801585
Ramsey43047801
Dakota36254390
Anoka33274384
Washington22065255
Stearns18723201
St. Louis14794262
Scott13273107
Wright12517115
Olmsted1177988
Sherburne871572
Carver771040
Clay690387
Rice670091
Blue Earth593835
Kandiyohi579474
Crow Wing519681
Chisago498445
Otter Tail481870
Benton446190
Winona418049
Mower404131
Douglas392568
Nobles386847
Goodhue385568
Polk342762
McLeod339349
Beltrami337351
Morrison324247
Lyon313044
Itasca312746
Becker310941
Isanti305754
Carlton300149
Steele299711
Pine282016
Freeborn280523
Nicollet258141
Todd247830
Brown244637
Le Sueur235020
Mille Lacs227247
Cass219924
Waseca208917
Meeker207434
Martin189328
Wabasha18623
Roseau180217
Hubbard160640
Houston157314
Dodge15214
Renville149540
Redwood147027
Fillmore13728
Chippewa136335
Cottonwood134820
Pennington134116
Wadena130920
Faribault122917
Aitkin118933
Sibley117310
Watonwan11728
Rock115714
Kanabec107419
Pipestone101424
Yellow Medicine97617
Murray9438
Jackson93510
Swift87918
Pope8025
Marshall77815
Stevens7418
Lake73718
Clearwater71914
Lac qui Parle68316
Wilkin67110
Koochiching61811
Big Stone5163
Lincoln5062
Grant4918
Unassigned47968
Norman4768
Mahnomen4417
Kittson40821
Red Lake3625
Traverse3055
Lake of the Woods2191
Cook1180

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 362189

Reported Deaths: 5414
CountyCasesDeaths
Polk58146549
Linn20653312
Scott18288207
Black Hawk16249291
Woodbury14961211
Johnson1383473
Dubuque13537194
Dallas1135890
Pottawattamie10765143
Story1021645
Warren555274
Clinton543284
Cerro Gordo533681
Webster518787
Marshall496272
Sioux494369
Buena Vista473236
Des Moines457661
Muscatine451191
Wapello4330108
Jasper416966
Plymouth394577
Lee375352
Marion359069
Jones294154
Henry292737
Carroll285548
Bremer280154
Crawford274735
Boone259630
Washington254147
Benton252854
Mahaska224346
Jackson221438
Dickinson217439
Tama213465
Kossuth208154
Clay193525
Hamilton192042
Delaware188839
Winneshiek188427
Buchanan185129
Fayette185035
Page183219
Hardin181039
Wright179731
Harrison179669
Cedar177923
Clayton168053
Butler166331
Mills163120
Floyd162740
Madison154518
Cherokee153935
Poweshiek153730
Hancock146829
Lyon145841
Allamakee145646
Iowa144423
Appanoose139147
Grundy139030
Jefferson138232
Winnebago138230
Cass134151
Calhoun133711
Mitchell130840
Louisa128241
Union126331
Chickasaw125213
Sac124218
Emmet121240
Shelby121033
Franklin118419
Humboldt117425
Guthrie116528
Palo Alto104921
Montgomery103936
Howard103121
Clarke100520
Unassigned9890
Keokuk98129
Monroe93128
Adair91928
Ida91032
Pocahontas85519
Davis82623
Monona81627
Greene77310
Lucas73821
Osceola70514
Worth6987
Taylor66412
Fremont5919
Decatur5789
Van Buren55918
Ringgold52020
Wayne48821
Audubon4869
Adams3264
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