Toys R Us founder Charles Lazarus dies

Charles Lazarus, the founder of Toys R Us, died Thursday at the age of 94, as the company he founded 70 years ago was preparing to sell or close all of its U.S. stores and to dismantle its international empire.

Lazarus, who was hailed as visionary retailer who invented the concept of a supermarket for toys, and who built it into a worldwide empire, ran the company for nearly 50 years and remained on the payroll as a consultant until 2004.

"There is a sad synchronicity in the timing of the death of Charles Lazarus," said Neil Saunders, managing director of GlobalRetailData. When Lazarus exited the company as chief executive in 1994, Saunders said, "he left a sound business that had pride and purpose." But his successors, he said, lacked his retail smarts and stumbled.

Lazarus' passing, he said, is a reminder that "retail is not just about numbers, metrics, and financials. It's about passion, purpose, and strategy."

Toys R Us, in a statement, called Lazarus' death the most heartbreaking news of a week of sad news that began with the announcement that the company would not be able to emerge from bankruptcy with its stores intact and that it was dissolving its U.S. operations.

"We will forever be grateful for his positive energy, passion for the customer and love for children everywhere," Toys R Us said.

"Charles Lazarus was respected and loved by the whole industry," said Jim Silver, editor of the toy review website TTPM and a leading toy industry expert. "He was an innovator, an industry leader, and dramatically changed the toy business and how toys were sold."

Lazarus was an old-school entrepreneur and merchant who branded his growing retail family of brands with letters inspired by his family name, and stamping each new division with the "R Us" last name. Toys R Us, and its sibling divisions, Babies R Us, and Kids R Us all vigorously fought any business that tried to use R Us with their names. Lazarus, according to company lore, wanted the R reversed in order to appear more childlike and playful.

Lazarus gave up day-to-day control of the company in 1994 but remained as chairman until 1999.

He started the company as a returning World War II vet who took over his father's bicycle shop and turned it into a baby furniture business, acting on a hunch that his fellow vets were ready to start big families. When customers at his store in Washington D.C., began asking it he also sold toys, he took over an adjacent supermarket, and displayed the toys on the existing supermarket shelves, rather than spend money on costly remodeling.

Lazarus' reputation for frugality lasted throughout his long career at Toys R Us, a career that made him the highest compensated corporate executive in New Jersey and among the wealthiest executives in the nation.

Susan McLaughlin, the former director of corporate communications for Toys R Us, remembered encountering Lazarus in the early 1990s in the elevator of the company's headquarters, which at the time was in Paramus. McLaughlin noticed that the chief executive was arriving for work carrying his lunch in a brown bag. When she asked about it he said, "I bring my lunch every day – got to save money."

Lazarus knew that his shoppers also wanted to save money. McLaughlin, now the co-owner of The Railyard Tavern in Fair Lawn, recalled a time when Lazarus was being interviewed for a magazine article honoring great entrepreneurs. He was asked if Toys R Us had put a low price on the hit toy Simon in order to create the impression all the toys in the store were low priced.

"All the prices were low," Lazarus said. "It wasn't to give an impression."

Lazarus' entrepreneurial instincts were spot-on accurate in the 1950s, when he began opening toy superstores, stocked with aisles and aisles of playthings, just as television was taking off, and fueling demand for toys like Barbie dolls, Slinkys and Hula Hoops.

The company that Lazarus built raised generations of “Toys R Us kids” but it now finds itself in the middle of bankruptcy and liquidation sales.

Over $6 billion in debt caused by a leveraged buyout in 2005 set the company down a difficult financial path. That debt, along with increased competition from rivals like Walmart, Target and Amazon, and changing retail shopping habits proved insurmountable.

The company filed for Chapter 11 in September. Weak holiday sales caused it to abandon its reorganization plan and move to full liquidation. Going-out-of-business sales at stores across the country were set to begin this week.

More Toys R Us news

SAVE TOYS R US?: Toys R Us could be saved by the father of Bratz dolls and his crowd-funding campaign

BANKRUPTCY: How Toys R Us chief Dave Brandon broke the bad news to employees

LIQUIDATION SALES: Toys R Us wins court approval for liquidation, as vendors call the plan unfair