Without Toys R Us, 30000 jobs, a black hole for toy makers

Growing Fear Toys R Us Gift Cards Will Be Worthless

Without Toys R Us, 30000 jobs, a black hole for toy makers

But the company's biggest albatross was that it struggled with massive 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.

Bankrupt retailers are not legally required to honor gift cards, although Toys R Us and Babies R Us stores have continued to accept them since their September bankruptcy filing.

FAO is now mainly selling toys online, but the company plans to open a new store in New York City's Rockefeller Center in time for this year's holiday season.

In January, Toys R Us announced it would close 182 of its USA stores - including Babies R Us - after a disastrous holiday season.

But not everyone agrees that Toys R Us' debt load led directly to its demise. She thinks that Hasbro and Mattel will be best positioned to add more small- to medium-sized toy makers to their portfolios.

Jim Silver, a New York-based long-time toy industry expert, said Toys R Us's CEO David Brandon told employees the company's plan is to liquidate all of its USA stores and after that, it could do a deal with its Canadian operation to run some of the USA stores.

Toys R Us says Amazon, Walmart, and Target discounted toys so steeply over the holidays that the toy chain couldn't compete. Silver believes they will be hurt more than Mattel Inc. and Hasbro Inc. since Toys R Us could account for up to 40 percent of their overall business.

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Tom Hadley was up from West Chester but wanted to make a quick stop at Toys "R" Us for his kids. The company is already closing its businesses in the United Kingdom.

Toys R Us, as a well-known and long-lasting brand, may yet have a future - the company even quoted its classic jingle in its bankruptcy filings.

So it's clear that big retailers that sell lots of different things are simply hoping toys are another draw to bring consumers in to the stores, as opposed to being the main focus. And Sharper Image, which also shut its stores, now sells gadgets online and opened a NY pop-up shop during the holidays a year ago.

KB Toys, founded in 1922, went out of business in 2009.

Babies R Us is considered a major player among stores that sell products like cribs, strollers and changing tables with about 14% of durable baby goods market. Toys R Us still has hundreds of stores, and analysts estimate it still sells about 20 percent of the toys bought in the United States. The bankruptcy took a toll on the confidence shoppers and vendors had in the chain, which also said it had trouble matching competitors' prices.

But it could stand to benefit from Toys R Us' decline. The company closed its flagship store in Manhattan's Times Square, a huge tourist destination that featured its own Ferris wheel, about two years ago.

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