“I don’t wanna grow up … I’m a Toys R’ Us kid…”
A seminal jingle from the 80s, no doubt. The reality as 2013 turns to 2014, holiday-season-style, is a little bit less good. First off, the economics are not good. They’re currently assigned a ‘Caa1’ bond rating by Moody’s, which is considered by most financial analysts to be “deep junk.” In reality, the way their bonds are being sold off, they’re probably operating at a single-C bond level, which is the lowest you can reach and still be a functional business with doors open (more or less). The basic problem is the same basic problem you see in other industries: a new business reality, coupled with low sales and high levels of debt. Amazon has killed them to a point, because it’s easier for parents to buy some toys online; electronic toys/games have a bigger market segment than plush toys, etc. and places like Target and Wal-Mart sell those games while you’re also there to buy milk. That helps. Valued around $7 billion in the mid-2000s, their IPO prospects have been rocky ever since.
That’s not all the bad news, though. Then there’s this ad:
It seems pretty nice and saccharine on surface, no? But it’s been attacked for being anti-science and anti-environmental. Stephen Colbert even referenced the ad on his show, explaining that it paints a picture where ‘the great outdoors’ is nothing compared to the ‘majesty of a strip mall.’ Even the National Recreation and Park Association is swinging a hammer at Toys R’ Us.
Probably should also be noted that the hashtag Toys R’ Us is using for its holiday season is #WishinAccomplished, which is, ahem…
We’re not done yet, though.
On the crime side, Toys R’ Us can’t stay out of the news either. Some parents in Tampa brought their seven kids along on a Toys R’ Us shoplifting spree (more details here and here), which resulted in about $300 worth of merch being jacked. Then, in Indiana, two women went shoplifting at a Toys R’ Us and nailed an employee with their car trying to get away. (They were apparently driving for a bit with the employee on the hood.)
Oh, and there’s been a murder associated with Toys R’ Us in the last year: Bernard Grucza, up in New York, killed an assistant manager before their shifts began over the summer. He was just denied bail, which is likely a very good thing.
Finally, there’s this, which has been a hot button issue on social media this year: what time does your local big box store open on Thanksgiving?
Here’s more on that side of the story.
Elsewhere in the toy world, there’s a big push to stop labeling things as “boys” or “girls.” Toys R’ Us has joined that movement. What they probably need is less ads like the one above and more ads like this one encouraging girls to get into science and featuring the Beastie Boys as the under-track (profiled in Slate yesterday):
I feel like every post I write on here comes down to the same basic tenet: the world is changing, and you gotta keep up. History, especially business history, is littered with examples of people and groups who couldn’t adapt to what people wanted next, or cared about next, or wanted to rant about next (thank you, Internet). Toys R’ Us is hitting a rough streak on a few fronts before its biggest part of the year. It can rebound, but it needs to make a few changes — and maybe invest in better people at some key spots (marketing, communications, etc.) But remember: there is a strong connection to the brand for some; there’s the ad all the way at the very top of this post, which many 40-somethings can probably still hum to perfection, and there’s an indelible association with childhood and the holidays too: