Toys “R” Us May Liquidate U.S. Operations

The Story:

A once powerful chain retailer of toys, Toys R” Us, in bankruptcy and struggling to reorganize since September 2017, may instead liquidate its US operations, according to a report on Bloomberg last week.

Background:

In the distant past, people who wanted to buy something would leave their place of residence to go out and get it. The places where they purchased items, “stores,” were sometimes clustered together as “malls.”

But the digital revolution has pressed hard on the viability of such so-called “brick and mortar” operations. For many people, it is simply easier to order something from a website and wait for a courier to drop it off on one’s porch. Many of the old-line retailers have failed to make the transition to the new era.

The Thing to Know: 

Toys “R” Us was the target of a leveraged buy-out, by a consortium led by KKR, in 2005. Some observers think this deal was the beginning of the end.

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