CEO leading effort to rescue Toys R Us
NEW YORK — Toy company executive Isaac Larian and other investors have pledged a total of $200 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, such as 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 one in every five sales made by Bratz dollmaker MGA Entertainment, where Larian is CEO, is rung up at a Toys R Us store.
Larian said 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 MGA chief executive officer Isaac Larian, left, has raised $200 million in leading an effort to save at least some of the Toys R Us stores slated to close in bankruptcy. 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 U.S. 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, Larian said, adding that "We can't just sit back and just let it disappear."
As it happens, the founder of the chain died this week. Charles P. Lazarus, the
World War II veteran who founded Toys R Us, died at age 94, Toys R Us confirmed in a statement on Thursday.
Lazarus first opened a baby furniture store in Washington, D.C., in 1948, and opened the first store dedicated only to toys in 1957. He stepped down as CEO in 1994.
The demise of Toys R Us will have a "devastating effect" on the toy industry, said Larian, who believes that 130,000 U.S. jobs could be lost when layoffs at suppliers and logistic operations are included.
A total Toys R Us liquidation could mean layoffs at an MGA plant in Ohio that makes Little Tikes toy vehicles. That brand accounts for 25 percent of MGA total sales.