Basically, the company had to pay for its own buyout when private equity firms KKL, Vornado, and Bain bought the company for $6.6 billion, mostly with loans.
Because the company then had to pay off those extreme loans, they were forced to sell off their assets and property, which they leased back from the very private equity firms that now owned them.
The same thing happened more recently with Red Lobster and JoAnn Fabrics.
Toys R Us was no more expensive than anywhere else. They charged the manufacturer’s list price, with occasional sales, like everyone else. Perhaps Walmart or Target had the same items at slightly lower prices, but not significantly, and a few aisles of selection couldn’t compete with TRU’s giant stores full of toys.
It’s a shame that a company that held a unique position in the marketplace, was destroyed not by their own bad business practices, but because of the predatory actions of financial sociopaths.
We should note that Toys R Us was also struggling at the time, although they would have had a better chance of success by not having 300-400M a year in debt payments to make; they could have used that to improve customer service and stuff.
I’m not defending the LBO here, just adding a little context.
Last time I was in one I was appalled at the prices. Plenty of customers though.
Blame the manufacturers, not Toy R Us. Companies can’t tell a retailer how much to price something (that’s illegal price fixing), but they can set a suggested list price, and as a general rule, companies do not sell above the list price, especially when they have aggressive cut-throat competition like Walmart, Target, and the wholesale clubs.
Probably a bit of both. I distinctly remember that everything I looked at in there was more expensive than normal around 2000. Maybe it was different later.