Toys R US Back On It’s Feet?
Geoffrey does not deserve to die. That’s why reaction to the news that Toys R Us has basically risen from the dead (or at least from bankruptcy court) is so positive.
This might be the first time in history that public opinion is firmly on the side of a bunch of hedge funds. But when it comes to Toys R Us, all bets off.
Here are the details, plus the reason why entrepreneurs, and not just kids, should be happy about this news.
A new Toys R Us
According to documents filed in the U.S. Bankruptcy Court (pdf), the debtors to whom Toys R Us owed money have decided to cancel an expected auction of the company’s intellectual property, and hold onto the assets themselves.
And, they say they contemplate “a new, operating Toys “R” Us and Babies “R” Us branding company that maintains existing global license agreements and can invest in and create new, domestic, retail operating businesses under the Toys “R” Us and Babies “R” Us names.”
In other words, a new Toys R Us, just a few months after the beloved chain closed all of its stores in the United States.
According to The Wall Street Journal, the debtors are a group of hedge funds, referred to somewhat comically as “Debtor Geoffrey” in the court case.
Moreover, the disappearance of the brand in June “left an $11 billion hole in the toy industry,” along with 33,000 people out of work, according to the Journal.
By the way, those workers have been fighting for severance apparently ever since Toys R Us shut down. They’re now going to share in a $20 million fund–but honestly, that only works out to about $600 each.
Requiem for a founder
The apparently premature demise of Toys R Us came only a few months after the death of its 94-year-old founder, Charles Lazarus. And if you’re celebrating the return of Toys R Us, it’s worth remembering him, too.
Lazarus was an entrepreneur before we really celebrated the idea in this country. He built the Toys R Us chain himself, originally launching a small furniture in Washington after he came home from serving in military intelligence in World War II.
He focused on kids, because that’s what shifting demographics suggested would be a booming market, and moved from furniture to toys. He explained that he realized families that had more than one child kept buying toys, even after their cribs and high chairs became hand-me-downs.
Ultimately, he sold Toys R Us to a bigger company, called Interstate Department Stores.
But in a cool twist, he stuck around and ultimately became CEO of Interstate Department Stores, leading the company through its initial public offering in 1978. And then he changed the company’s name back to Toys R Us.
When he retired in 1994, there were more toys being sold at Toys R Us than anywhere else. And another entire generation of kids grew up associating a trip to the big toy store with some truly happy memories.
So, be happy for the return of Toys R Us. But also, be grateful for entrepreneurs like Lazarus, who built the company in the first place. Without him, none of this would have happened.