Toys R Us isn’t going out of business because it can’t sell toys. It isn’t going out of business because it’s being out-competed by Amazon and Walmart. It’s going out of business because of predatory, venture capitalism.
The demise of Toys R Us is ultimately related to the kind of complex debt-buying schemes that make bankers and financiers rich while leaving nearly everyone else significantly poorer. It’s the worst, most unproductive form of capitalism (in that it literally doesn’t produce anything) and it has claimed another victim.
Toys R Us is very good at selling toys. Estimates vary, but 15-20% of all US toy sales came through Toys R Us. Think about that: 20%. One out of every five toys sold in America has Geoffrey’s hoofprints on it. They’re not competing against just Walmart and Target, but every grocery store, pharmacy, gas station, mall kiosk, GameStop, bookstore, calendar store, game store, comic shop, department store, and hundreds if not thousands of small-time websites – literally anywhere you can buy any new toy – and yet TRU owned a fifth of the industry. But people still say the blame lies with Toys R Us.
Given what happened with Sears and Sears Canada — the Canadian company holding on only just a little longer than the US one, before ultimately declaring bankruptcy — I imagine we’ll see Toys R Us Canada disappear in the next few years, as well.
Thanks to keithzg for sharing the OAFE link on Mastodon.