Source: Toys R Us liquidating in U.S.
Expert says troubled retailer will close or sell all stores
Toys R Us will sell or close all its U.S. stores, according to an industry insider.
Jim Silver, a toy industry expert, said Toys R Us CEO David Brandon told employees the plan is to liquidate all its U.S. stores and after that, it could make a deal with its Canadian operation to run some of its U.S. stores.
The company declined to comment.
The Las Vegas area is home to fewer than 10 Toys R Us and Babies R Us stores.
The chain filed for Chapter 11 bankruptcy protection last fall, saddled with $5 billion in debt that hurt its attempts to compete as shoppers moved to Amazon and huge chains like Walmart.
It pledged then to stay open, but it reported weak sales for the critical holiday season. In January it announced plans to close about 180 stores over the next couple of months, leaving it with about 700.
The stores at 2150 N. Rainbow Blvd. and at 7020 Arroyo Crossing Parkway were among those included in a January announcement of closures.
Toys R Us had dominated the toy store business in the 1980s and early 1990s, when it was one of the first of the “category killers”— a store totally devoted to one thing. Its scale gave it leverage with toy sellers, and it disrupted general merchandise stores and mom-and-pop shops. Children sang along with commercials about “the
TOYS R US
The executive knew the casino needed to enhance its nongaming amenities and ambiance much as Lasvegasresortshaddone.sohe built a pool in front of the hotel overlooking the coast to be visible to guests upon arrival.
Icingonthecakewouldbe20 Zahidi palm trees worth about $130,000 surrounding the pool.
But the tree broker warned that thefarmerwouldgrabthefirsttrees he saw on the palm plantation. If he wanted the best trees, Lee should send someone to Palm Desert to pick them, the broker said
So Lee, a licensed pilot, boarded the small plane with Fanger to chose the straightest, healthiest palms.
“The guy who owns the farm showed up because he didn’t believe a company CEO was there picking out trees,’’ Lee said from his office in Summerlin. “It is one of the things that happens in a small company.’’
The 61-year-old, who has run some of the nation’s largest properties during his 30-year career in the casino industry, has had quite of few of those “things” since agreeing to runfullhouseresortsattheendof 2014.
Stressing customer service
Lee has changed policy at the Fallon casino to permit residents — mainly Air Force personnel — to cash checks exceeding $1,000 at the cage with the hope they would stay a bit and play. He brought reindeer to a struggling Indiana resort during Christmas season to boost visitations.
Lee is in his third year of trying to turn around the long-struggling casino operator, which operates five properties and produces yearly revenue of $161 million, a sum The Mirage generates in three months.
The jump in Full House Resorts share price since his takeover suggests Lee is succeeding. The stock is up three-fold since he joined in December 2014 compared with a 32 percent rise for the S&P 500 index and 46 percent for the Dow Jones Gambling Index as of March 6.
Full House’s cash flow margin is just11percent,lessthanhalfthatof larger peers, according to Macquarie Research, meaning a 1 percent improvement can boost cash by nearly 10 percent.
That is driving Lee to to find efficiencies and new means to boost business. Macquarie Research analyst Chad Beynon called Full House
“the most creative gaming company nobody ever heard of ” in its November report on the company.
Full House, however, recently reported 2017 earnings that missed Wall Street expectations because of bad weather in the South and Midwest and lack of snow in Northern Nevada.
Net revenue for the year rose 11 percent to $161 million, driven by an acquisition in mid-2016. But the company still posted a net loss of $5 million for the year.
Casino ferry owner
Improving performance of small casinos in competitive markets that lack the constant tourist flows of
Las Vegas requires a lot of hands-on work and out of the box thinking,
Lee said.
Rising Star Casino in Indiana is an example.
Located on the Ohio River across from Boone County, Kentucky, and Cincinnati, Rising Star was a gem in its heyday, generating $50 million of cash flow on $160 million of revenue,equivalenttotheentirerevenue of Full House today.
But two competitors later opened to the north and south of the property, located near bridges delivering people from Kentucky and Ohio. That drove Rising Star’s cash flow down to just $2.7 million.
Full House data show that Indiana residents living near Rising Star are dropping about $150 a year on gaming at the casino. Kentucky residents though were losing just $4 a year, indicating they were doing the majority of their gambling at the other two casinos closer to home.
Boone County, with a population of 120,000, is just 2,000 feet from the casino across the Ohio River but an
hour’s drive. Building a bridge was out of the question. It would require years of approvals and possibly tens of millions of dollars in construction costs.
But with the potential upside from Kentucky residents so promising, Lee chose the only alternative. He decided to revive ferry service across this part of the river that died out decades ago when the bridges were built.
After two years of lobbying for the $1.5 million project, Lee aims to open the ferry service for the
July Fourth weekend. The time is dependentonu.s.armycorpsof Engineers giving permission by mid-march as promised.
The ferry, possibly the first owned by a U.S. casino, would hold 10 cars and make one round trip every 10 minutes. Lee’s response to analysts’ questions during a March 1 conference call shows how important the project is to the struggling property.
‘’If they don’t (come through on time), I am going to be in a tent in front of the Corps of Engineers office in Louisville on (Friday), and I will sit there until they give us the permit,’’ said Lee, who stepped down from Pinnacle in 2009 after an outburst with a government official.
The company now expects to receive the permit next week, Fanger said.
And much like with Silver Slipper, Lee wants to create a sense of arrival for those traveling by ferry. He is upgrading an old pavilion on the property with trees, new flooring and street lights.
Contact Todd Prince at 702 3830386 or tprince@reviewjournal.com. Follow @toddprincetv on Twitter.