Toy firm CEO leads bid to salvage Toys R Us
Unsolicited bid faces a number of hurdles such as finding other deep-pocketed investors
Toy company executive Isaac Larian and other investors have pledged a total of $200 million (Dh735 million) and hope to raise four times that amount in crowdfunding in a bid to save potentially more than half of the 735 Toys R Us stores that will go dark in bankruptcy proceedings.
The unsolicited bid faces a number of hurdles like finding other deep-pocketed investors, as well as getting a bankruptcy judge to approve such an unusual plan. It is the first known plan to keep the Toys R Us brand alive.
The long-shot bid would be a huge benefit to Larian. Nearly 1 in every 5 sales made by Bratz doll-maker MGA Entertainment, where Larian is CEO, is rung up at a Toys R Us store.
Larian says he and the other investors, which he declined to name, believe that saving part of Toys R Us will be good for the toy industry, customers and workers.
The announcement last week that Toys R Us would be lost generated an enormous outpouring of nostalgia. #SaveToysRUs became a trend on social media.
The group now trying to save a remnant of the toy chain is hoping that with Toys R Us on the brink, it can reach its goal of raising $1 billion in funding. The website savetoysrus.com directs consumers to a GoFundMe campaign to do that.
Toys R Us sought court approval last week to liquidate its remaining US stores, threatening the jobs of some 30,000 employees and spelling the end for a chain known to generations of children and parents for its sprawling stores, singalong jingle and Geoffrey the giraffe mascot.
The store has an iconic place in American culture, said Larian. Larian, a billionaire, is using his own money, not MGA funds, for the bid.
How could Larian save a store that has laboured to remain relevant in the age of Amazon.com? For one thing, Larian would be free of the $5 billion in debt that hampered the current owner of Toys R Us. The other reason is selfpreservation. The toy industry needs a national presence like Toys R Us, where designers can get real world reaction to new toys that children pull from shelves.