Several lifetimes ago—March 2018, to be precise—Toys ‘R’ Us began to liquidate its stores after a final bout with bankruptcy. If the company l

The Curious Case of a Toys ‘R’ Us Killer

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2021-05-23 04:00:04

Several lifetimes ago—March 2018, to be precise—Toys ‘R’ Us began to liquidate its stores after a final bout with bankruptcy. If the company lives on in any way, it is almost certain to be only as a trademark, much as Radio Shack and Montgomery Ward still exist as brand names associated with unrelated e-commerce operations. The actual toy retailer, which began in what’s now a bar in the Adams Morgan neighborhood of Washington, D.C., is as dead as a busted wind-up motor.

The common characterization of the toy giant’s death was that private equity firms killed it, with plentiful reference to the involvement of Bain Capital. This places it in the same shoes as Sears, Payless, and other stodgy retailers whose slow but perhaps manageable declines were accelerated by “vulture capitalists.” Of course, competition from Internet retailers, especially Amazon, was a major factor. There were also some weak attempts to fashion a natalist or anti-feminist argument out of the toy retailer’s demise, to the effect that Toys ‘R’ Us might have survived if people were having more kids.

A more subtle, but very real, element of the Toys ‘R’ Us story involved the real-estate firm Vornado Realty, a third major stakeholder of Toys ‘R’ Us after Bain and a second private equity firm, Kohlberg Kravis Roberts. While some commentary picked up on the obvious connection between a real-estate firm and a large, ailing brick-and-mortar company, much of the press coverage mentioned Vornado only in passing, if at all. Ironically, Vornado didn’t end up faring too well as a Toys ‘R’ Us owner, and the company now focuses almost entirely on high-end commercial real estate in New York City.

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