All 735 Toys ‘R’ Us and Babies ‘R’ Us outlets nationwide are closing.

Six months into bankruptcy proceedings, the once-dominant toy retailer is offering deep discounts nationwide.

Despite a strong domestic toy market, the debt-ridden chain fell victim to changing consumer preferences and other challenges.

When Glenn and Michelle Takemoto were kids, their parents would take them to Toys ‘R’ Us, telling them to pick one tantalizing toy off the miles of glimmering shelves to take home.

At the store in Morena on Saturday, their 2-year-old daughter Eliana left with a small Powerpuff Girls doll, nearly all the toys already gone after the bankrupt big box retailer continued its second day of liquidating $2 billion worth of inventory.

“We grew up with Toys ‘R’ Us, which is why we came here today,” said the father. “There really wasn’t much left in there. We wanted to bring her for nostalgia.”

All 735 of Toys ‘R’ Us and Babies R Us outlets nationwide are deeply discounting most purchases.


At the Morena store, rows of “Talking Snowball” — a sassy electronic bunny — remained at $9.99 each and Wonder Woman dolls were going for $15.99, 60 percent off the suggested retail price. Shelves also brimmed with items like diapers and baby formula, which aren’t included in the sales, but most aisles that once held Legos and Star Wars toys were bare.

With $5 billion in debt left over from a leveraged buyout by investors KKR, Bain Capital and Vornado Realty Trust, Toys ‘R’ Us declared bankruptcy in September. The once-dominant big box retailer hoped for strong Christmas season sales, but they never materialized

Outside the United States, the company is pursuing a “going concern” reorganization by lining up potential buyers to take over stores in Canada, Asia and Central Europe.

International operations in Australia, France, Poland, Portugal and Spain consider to weigh their options, including seeking buyers in their markets, according to a statement issued by the corporate headquarters in New Jersey.


Struggling to pay its British tax bill and fund pension liabilities, the company’s 105 stores in the United Kingdom sought protection from debtors there in February. More than 3,000 workers are expected to lose their jobs.

Toys ‘R’ Us American stores threaten to shed more than 33,000 positions, more than twice the number lost when Sports Authority declared bankruptcy in 2016, shuttering 463 shops.

Like Sports Authority, Toys ‘R’ Us is the latest victim in what business analysts increasingly dub the “retail apocalypse,” a gathering storm of economic challenges that began deluging the industry in 2015 and isn’t expected to end for several years.

Credit Suisse predicts that up to a quarter of America’s shopping malls will go out of business by 2022.


× Toys R Us is kicking off its going-out-of-business sales after announcing plans to sell or close all of its U.S. stores.(March 22, 2018)

The causes are complex but include the rise of e-commerce giants like Amazon, rising retail labor costs, the overbuilding of malls nationwide in previous decades and consumers shifting to discount chains like Family Dollar instead of mall anchors and big box behemoths, a trend that began in the wake of the 2008 recession.

But that doesn’t mean kids no longer play with toys. The fall of Toys ‘R’ Us came in the midst of rising domestic toy sales — up 4.5 percent on average over the last three years, according to global information analyst NPD Group.

In fact, Toys ‘R’ Us accounted for about 12 percent of American toy sales in 2017, according to the firm’s consumer tracking service.


Toys ‘R’ Us hasn’t announced when its going out of business sale will end, but the retailer already won’t accept coupons, isn’t redeeming reward points and set April 21 as a deadline for using gift cards for purchases.

The company’s “web stores are currently open and customers can continue to shop on them for a limited time,” according to an online Toys ‘R’ Us liquidation statement.

Customers with layaway accounts are urged to pay remaining balances and retrieve their products or seek refunds on the deposits now. Otherwise the company will sell the items.

Charles Lazarus, the 94-year-old founder of Toys ‘R’ Us, died on Thursday, a day before the closeout sales began. He no longer held a stake in the company and hadn’t helmed it since 1994, but presided over its great rise.


He entered the toy business in 1948, riding a wave of kids born in the aftermath of World War II, and by 1974 boasted 50 stores in what was becoming a national chain of large, specialized discount stores that offered a huge selection at low prices.

Unlike the small shops they often displaced, his Toys ‘R’ Us outlets were designed to operate like “toy supermarkets,” tantalizing consumers with more than 11,000 offerings throughout the year spread out over 45,000 square-feet of sales space, according to a 1998 Federal Trade Commission probe that found the company used its size and power to try to hurt competing wholesale clubs.

Because of its perch atop the industry, for generations of children, Toys ‘R’ Us became synonymous with fun, just as its Christmas catalog became a blueprint to the holiday season.

“It was different from today,” said Claudia Fuentes as she left the Moreno outlet, flanked by her husband Angel and their nephews Aidan Serrano, 3, and Antonio Sandoval, 9. “Oh, yeah. A lot different. I remember that by October, they’d have the big book for Christmas. We loved that.”


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cprine@sduniontribune.com