All Toys 'R' Us stores to close by Friday
NEW YORK -- This week will bring the end to an American institution, with all Toys 'R' Us stores set to close by Friday.
Stores with a lot of inventory are offering 60 to 80 percent discounts.
Those with less stock will likely close sooner, but discounts are a bit better: up to 70 to 90 percent off.
The closing of the company's 740 U.S. stores will finalize the downfall of the chain that succumbed to heavy debt and relentless trends that undercut its business, from online shopping to mobile games.
Toys R Us had dominated the toy store business in the 1980s and early 1990s, when it was one of the first of the "category killers"- a store totally devoted to one thing. Its scale gave it leverage with toy sellers and it disrupted general merchandise stores and mom-and-pop shops. Children sang along with commercials about "the biggest toy store there is."
But the company lost ground to discounters like Target and Walmart, and then to Amazon, as even nostalgic parents sought deals elsewhere. GlobalData Retail estimates that nearly 14 percent of toy sales were made online in 2016, more than double the level five years ago.
The toy seller said in bankruptcy filings that Amazon's low prices were hard to match, and it said its Babies R Us chain lost customers to the online retailer's convenient subscription service, which let parents receive diapers and baby formula at their doorstep automatically. Toys R Us blamed its "old technology" for not offering its own subscriptions.
But the company's biggest albatross was that it struggled with massive debt since private-equity firms Bain Capital, KKR & Co. and Vornado Realty Trust took it private in a $6.6 billion leveraged buyout in 2005. Weak sales prevented them from taking the company public again. With such debt levels, Toys R Us did not have the financial flexibility to invest in its business. The company closed its flagship store in Manhattan's Times Square, a huge tourist destination that featured its own Ferris wheel, about two years ago.
(The Associated Press contributed to this report)
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