It seems as though every month there is a new announcement of retail store closings. This should come as no surprise, because a lot of the online retail giants are doing so well, perhaps the most obvious example being Amazon.
Many people are looking to online shopping as an alternative to going to their local stores, because it offers them an added layer of convenience. With this, however, is a sort of “retail apocalypse” we’ve reported on several times before.
The next casualty? Toys R Us.
Toys R Us recently announced that it plans on closing approximately 180 stores across the United States. These stores make up approximately one-fifth of the total stores that the company currently has in the country. The reason they gave for the closings is that they plan on restructuring and hopefully emerging from bankruptcy protection as a result.
The closures still need to be approved by the court in order to actually happen, but there is no reason to expect them to not happen. Even though it has not yet been approved, management is planning on starting the closings in the beginning of February. The closings will continue until mid-April. USA provided a list for readers to check to see if their local store is affected.
Chairman and Chief Executive Officer of Toys R Us David Brandon released a memo to consumers on Tuesday explaining the decision.
“The reinvention of our brands requires that we make tough decisions about our priorities and focus,” the memo said. “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.”
It was also announced that a few of the existing locations of Toys R Stores would be co-branded as Toys R Us and Babies R Us stores. This information came out of the Wayne, New Jersey retailer. As a result of these closings and co-branded stores, Toys R Us expects to be able to improve the online shopping experience as well as the in-store shopping experience. They have also announced that they plan to revamp their loyalty program so that it appeals to even more consumers in the market.
This is not something that should come as a shock to anyone that has been paying attention to the moves that Toys R Us has been making over the past few months. Only four months ago was when the company filed for bankruptcy. This happened before the holiday season hit, and they did this as a method of protection because sales were declining while debt was piling up. Toys R Us has struggled to meet the needs of their customers online, and as a result they have experienced increased competition from Amazon, Target, and even Walmart.
The 83 locations in Canada are not supposed to be impacted, and none are in the process of being closed. This information came as part of another memo that was released by the president of Toys R Us Canada, Melanie Teed-Murch.
“(Toys R Us) will be taking additional steps to improve the overall customer omnichannel experience with compelling promotions, continued improvements to mobile and digital marketing and enhancements to our baby registry and loyalty programs,” she said.
After this was announced, a lot of analysts started looking at which retail giant is in place to benefit the most. There are some already claiming that Target is likely going to play out to be the biggest winner. Target is positioned for this because of the location of its stores to a lot of the Toys R Us locations that have been announced as closing over the next few months. A lot of the shoppers who may have gone to the Toys R Us location before will likely go to the Target locations after they have closed.
While there are still a few things that need to happen before these stores can close, it will only be a matter of time before the ones on the list start to close their doors. If you want to get some deep discounts on Toys R Us items, now is the time.
Regards,
Ethan Warrick
Editor
Wealth Authority
