JUST US, THE TOYS ARE ALL GONE
Toys R Us employees have been taking part in protests across the US, demanding new laws that would require retailers to pay their employees severance, writes
CHERYL Claude was two years out of high school, already married and raising her first child when she stopped at a Toys R Us to buy diapers one day in 1985.
The store manager noticed how Claude picked up a toy that had fallen on the floor and put it back on the shelf. He offered her a job on the spot.
She went on to spend 33 years stocking shelves and unloading trucks at one of the world’s largest toy retailers. “This was my home,” said Claude, 52.
Her career ended last Thursday when the Toys R Us on Route 1 in Woodbridge, New Jersey, shut its doors for good. By then, the shelves were mostly bare, except for a scattering of stuffed animals, tween jewellery and polyester pillows.
Another retail casualty, Toys R Us, a brand that dates to 1957, had closed the last of its 735 stores across the country last week. As more Americans shop online, the company’s cavernous suburban stores became outdated and the US$5 billion (RM20.16 billion) debt from its private equity owners too onerous.
Most large companies that file for bankruptcy end up paring their debts, cutting costs and continuing to operate. But lenders to Toys R Us decided its US operations were worth more in a final sale than as a functioning business.
Claude, an assistant manager, and the company’s thousands of other workers will not receive severance after they leave. Employees were told there’s not enough money left after paying the company’s creditors, bankruptcy attorneys and consultants.
Claude kept working into the final weeks, alongside other longtime employees who stayed out of a sense of pride, necessity or denial. Her first job was working overnights in the stockroom at the former East Brunswick store, earning US$3.35 an hour. She took care of her daughter during the day, while her first husband worked as a baker at the nearby Sunshine Biscuit factory.
By the end, Claude was making about US$62,000 as an assistant manager in Woodbridge. “This was a good job,” she said.
Many of the workers didn’t pay attention when the company was sold to the investment firms KKR, Bain Capital and Vornado Realty Trust in 2005. The company had good years and bad, but always seemed fundamentally fine.
In September 2017, Toys R Us declared bankruptcy, citing huge debts. The company’s lawyers were confident the retailer could keep operating, once it cut its loan payments. But after a weak Christmas season, creditors doubted whether the company had a viable future and pushed to close its US operations.
Led by the worker advocacy group Rise Up Retail, Toys R Us employees have been taking part in protests across the country, demanding new laws that would require retailers to pay their employees severance and limit the amount of debt that private equity-owned companies can incur.
The workers are owed roughly US$75 million in severance. The company’s bankruptcy lawyers and advisers, by comparison, are expected to be paid as much as US$348 million in fees.
On the last morning, Claude and her co-workers gathered by the cash registers for a breakfast of bagels, brownies and orange juice. A small crowd of customers waited outside the door. The workers in their sky-blue shirts got ready to greet them one last time. But, the doors never really opened. At the last minute, a toy reseller cut a deal with the company to buy everything that was left in the Woodbridge store.
As the Toys R Us workers rang out the reseller’s moving crew, a man in a tank top and a little girl in pink Crocs walked up to the front door, hoping to come in.
“I am sorry, partner,” Claude said. “We are closed. There is nothing left.”
The workers are owed roughly US$75 million in severance. The company’s bankruptcy lawyers and advisers, by comparison, are expected to be paid as much as
US$348 million in fees.