Toys R Us, the chain that grew to become the best-known toy retailer in the United States over a span of several decades, will close more than 800 stores around the country, according to reports on Wednesday.
The company, which filed for Chapter 11 bankruptcy back in September, has struggled to pay down billions in debt from a leverage buyout in 2005. The New York Times reported that 30,000 jobs could be lost.
COMMENTARY: Hey, sad internet, use your imagination! If Toys R Us goes bust, pick a smaller box to shop in
Big-box stores such as Walmart and Target ate away at the brick-and-mortar advantage Toys R Us once enjoyed, and the shift to online shopping and Amazon’s dominance in that arena was proving costly. The times said Toys R Us controlled 13.6 percent of the toy market in the U.S. in 2016. Walmart held 29.4 percent of the market share, Amazon had 16.3 percent and GameStop had 13.9 percent.
It’s worth remembering that Toys R Us was once partnered with Amazon, in a 10-year deal signed in 2000 that made it the e-commerce giant’s exclusive seller of toys and baby products. A report last year in Quartz said Toys R Us agreed to give up its online autonomy, with ToysRUs.com redirecting back to Amazon. Toys R Us paid Amazon $50 million a year plus a percentage of its sales through the Amazon site.
In 2003, Amazon started allowing merchandise from other sellers to appear on its site and Toys R Us sued to terminate the deal. It won the right in court to restart its own website, Quartz reported, but by then Amazon was off and running with e-commerce and its own identity.