Toys R Us points to holiday ‘missteps’
Says 182 stores to close
Toys R Us, a nostalgic favorite even as many shoppers moved to Amazon and huge chains such as Walmart, plans to close up to 182 stores, or about 20 percent of its U.S. locations.
In Chattanooga, the Toys R Us near Hamilton Place mall and the Babies R Us nearby on Gunbarrel Road will continue to operate. But the retailer will close Toys R Us outlets in Nashville and Memphis in Tennessee and in eight Georgia locations across the Peach State.
Toys R Us closed a store in Hixson in early 2015.
The company that once dominated toy sales in the U.S. has been operating under bankruptcy protection since last fall, when it filed for Chapter 11 under the weight of $5 billion in debt. Toys R Us operates about 900 stores in the U.S., including Babies R Us stores.
Loyal fans lamented the closing of their hometown stores. Many said they liked to shop at Toys R Us because of the atmosphere and the variety of toys they found.
“It’s an experience,” said Bryan Likins of Indianapolis, who takes his 4-year-old daughter there. “She likes to walk through the store and point to different toys she liked.”
Likins said he remembers playing with the video games and trying out bikes with his brothers at Toys R Us, and liked continuing that with his child. He said he shopped on Amazon only for specific items that he wasn’t sure if other toy sellers carried.
The store closings will begin in February and the majority of locations identified for closure, which include Babies R Us stores, will go dark by mid-April. At some other
locations, Toys R Us and Babies R Us stores will be combined. The bankruptcy court still must sign off on the closings.
Toys R Us wouldn’t say how many jobs will be cut. It said some employees will be moved to other stores and those who cannot be will get severance. Chairman and CEO Dave Brandon said Wednesday that tough decisions are required to save Toys R Us.
He acknowledged “operational missteps” during the critical holiday shopping season when shopping at its stores and online wasn’t as easy as it should have been.
“The actions we are taking are necessary to give us the best chance to emerge from our bankruptcy proceedings as a more viable and competitive company that will provide the level of service and experience you should expect,” he said in a letter to customers.
Gerrick Johnson, an analyst at BMO Capital Markets, had estimated that holiday sales at the company’s North America stores were down more than 10 percent. He attributed much of the decline to people’s confusion around the bankruptcy filing and a fear of buying gifts at Toys R Us because they thought they wouldn’t be able to return them if needed. Johnson also blamed a weak marketing campaign and email promotions that didn’t create a sense of urgency.