- Toys R Us (UK) have entered administration today after struggling to pay a VAT demand.
- The chain has made a loss for the last 7 years (from 8) and has struggled with a mountain of debt and an aged store estate with locations that are broadly out of town.
- Of course the Internet and Amazon have a lot to do with the demise of Toys R Us. However, any business heading in to administration should look at itself first and foremost.
The 5 that matter for Toys R Us.
Grocery Insight recently stumbled upon a Toys R Us near York that was in the process of closing down (ahead of this announcement today). The reasons identified in this outlet are essentially symptomatic of the chain at large.
- Smyth’s Toys loom large here, they’ve cornered the ‘pure play’ market in Toys.
- Supermarkets continue to expand, Toys are a key battleground with Sainsbury’s / Argos now one company. Both Tesco and Asda were strong in Toys at Christmas, running events and also bagging a number of ‘exclusives’.
- Toys R Us and their dated stores didn’t inspire confidence. Where they stocked popular lines like LOL surprise, the store design meant they were entirely lost down an aisle.
- Museum era front end ‘kit’ sums up the general malaise with the chain. This kit still works, but with the backdrop of dated, uninteresting stores. It tells a story.
- A tragic image. Poor Geoffrey. However the entrance sets the tone; Click/Collect still marketed as ‘cutting edge’.
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