While the doors may soon close for Toys “R” Us, there is still at least one last chance to keep part of the toy retailer alive.
Isaac Larian, the CEO of California-based toy and entertainment company MGA Entertainment, and a group of investors have pledged $200 million, with a goal of raising $1 billion in crowdfunding via savetoysrus.com. Potential benefactors, as first reported by The Associated Press, are directed to a GoFundMe page in an effort to save at least half of the more than 700 stores that will close in the company’s bankruptcy proceedings. “We are trying to #SaveToysRUs for future generations,” Larian told FOX Business by email.
Toys “R” Us filed for bankruptcy last year as it struggled in a competitive retail environment and faced long-term debt issues. The retailer had hoped to keep its remaining U.S. stores open, but last week it filed a motion with a bankruptcy court for approval to start winding down all of its American stores. The company plans to start the process Friday, one day later than originally planned.
The retailer’s demise not only is a heartbreaking event for a generation that grew up visiting the store and seeing its commercials on TV, but it could also end up hurting the entire industry, according to Larian, whose company, MGA, generates 20% of its sales at Toys “R” Us. MGA’s brands includes L.O.L. Surprise!, Little Tikes, Bratz and more.
The decline in many brick-and-mortar retailers is at least partly attributable to the onslaught of e-commerce behemoth Amazon. Despite the trend toward online shopping, Larian, who is using his own funds – not MGA’s – to fund the project, said the revived Toys “R” Us wouldn’t be an online retailer.
“The continued shift to digital and loss of brick-and-mortar stores requires marketers to evolve,” he explained. “We [MGA] have been ahead of that curve and leveraged several unique strategies that have helped us become the strongest growing toy company in the industry.”
Toys “R” Us announced last week that it is taking steps to stay open in Canada, Asia and parts of Europe.
Currently, Larian and the investors’ goal is to save at least half of the 735 remaining U.S. stores. He said if he and his group can salvage 400 locations, one-third of the 130,000 jobs could be kept.
“There’s no room for Toys ‘R’ Us not to be around,” he said. “Without toy innovation that was always launched at Toys ‘R’ Us first before it went to other retailers, toys will suffer and this will have a long-term ripple effect on the rest of the retailers. We must save Toys ‘R’ Us.”