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What shoppers have to say about Toys R Us seeking bankruptcy protection

On Nov. 22, 2012, Ceres' Scott Conway and wife Jacqulyn check out  at the Toys R Us on Sisk Road in Modesto before rushing off to Target for more early Christmas shopping on "black Thursday."
On Nov. 22, 2012, Ceres' Scott Conway and wife Jacqulyn check out at the Toys R Us on Sisk Road in Modesto before rushing off to Target for more early Christmas shopping on "black Thursday." Modesto Bee file

News that Toys R Us is seeking Chapter 11 bankruptcy protection was met with little surprise by Modesto-area shoppers who say they regularly find better deals from competitors including Target, Walmart and Amazon.

Among well more than 100 comments on The Bee's Facebook page, a few people called the chain their "last resort" when toy shopping, and several said the local brick-and-mortar store is dirty and badly in need of a makeover.

A couple of shoppers noted that in stores, if not online, Toys R Us has a greater selection of toys than general retailers. Others pointed out that the chain offers a price match guarantee: "Simply come in store and show us the same item in a competitor's printed ad, selected online retailer's website or our website."

But several commenters were not impressed by that policy. "This is not a benefit," Thomas Russo said of the price match. "Stores should be internally price-matching by knowing their competitors, not making their consumers do that work." 

Carle Michael Morrow III added, "Here is a thought, if their customers didn't have to take extra steps to price match an item, they probably wouldn't be filing for bankruptcy. Why would I even drive to Toys R Us when I know I could get toys for cheaper at Target or Walmart?" 

Convenience strikes a chord with shoppers, and the Modesto store's Sisk Road location — with only Orchard Supply Hardware as an immediate neighbor — likely doesn't help it. Ceres teacher Veronica Phillips said she rarely shops for just toys, so is more likely to make toy purchases at Target. And Modestan Tiffany Tiwater said that while she likes Toys R Us, "there is no real need to go to a store that strictly sells toys when you can get all that you need, including toys, at one storefront."

In Monday's announcement, Toys R Us Chairman and Chief Executive Officer  Dave Brandon said, "Together with our investors, our objective is to work with our debtholders and other creditors to restructure the $5 billion of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business, continue to improve the customer experience in our physical stores and online, and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide."

The announcement also said that the comppany’s roughly 1,600 Toys R Us and Babies R Us stores around the world will continue to operate as usual, as will its loyalty programs, including its Rewards R Us, Geoffrey’s Birthday List and Babies R Us Registry.

The move comes at a critical time leading into the holiday season that is crucial to retailers’ bottom lines, The Associated Press reported. The company said it was “well stocked as we prepare for the holiday season and are excited about all of our upcoming in-store events.”

But a bankruptcy attorney, Charles M Tatelbaum of the Tripp Scott law firm in Florida, issued a statement that the Toys R Us announcement "has had a boomerang effect in that suppliers of toys, children's clothing and goods for the holiday selling season are now reluctant to deliver new inventory to Toys R Us without some or all cash upfront. This creates an impossible situation for the cash-strapped retailer" that could impede its ability to have enough inventory to meet the holiday season demand. 

Neil Saunders, managing director of GlobalData Retail, told the Associated Press that “even if the debt issues are solved, Toys R Us still faces massive structural challenges against which it must battle.” The chain started losing shoppers to discounters like Walmart and Target and then to Amazon. GlobalData Retail estimates that in 2016, about 13.7 percent of toy sales were made online, up from 6.5 percent five years ago. 



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