|Retail Apocalypse Now|
Need to note a few facts about Toys R Us:
- Thanks to the massive debt post-takeover, the company has had to service over $500mn of interest every year. Sales failed to grow rapidly enough to make the debt sustainable.
- Also thanks to the debt, the company spiraled into a black hole of cash drain. There is no resource to invest in better store experience to compete with online prices, or better livelihood for its store employees, killing morale.
- Despite intense competition from online stores (Amazon) and big box offline stores (Walmart and Target), Toys R'Us still accounted for 20% market share of US toys sales. Furthermore, despite the well-covered retail apocalypse, 2017 holiday toy sales exceeded market expectations.