Its stock dropped 6% on Monday, to its lowest level since 2009, and Hasbro ( HAS) fell 1%. Mattel ( MAT), acknowledging the threat from tech, recently hired a new CEO who used to be an executive at Google. Investors are worried that Mattel and Hasbro could be in trouble, too. Toy companies also have to deal with the fact that many kids are increasingly playing games on consoles, phones and tablets and not with old-school action figures, dolls and other toys.Įven Lego has been struggling lately. A lackluster summer at the box office might be hurting the entire toy industry, which depends on hit movies to drive sales of licensed toys. The troubles facing Toys 'R' Us aren't just about competition from Amazon ( AMZN) and Walmart ( WMT). It recently opened a temporary, smaller store for the holidays in another part of the popular Manhattan tourist spot though.
It closed its gigantic store in New York's Times Square at the end of 2015. That includes the children's clothing store Gymboree, teen outlet Rue21 and Payless Shoe Source. Toys 'R' Us joins a list of hundreds of companies that have succumbed to the online threat and filed for bankruptcy protection this year. Related: Toys 'R' Us bankruptcy fears hit Mattel and Hasbro "Today marks the dawn of a new era at Toys 'R' Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way," said Brandon in a prepared statement. The company reported that same-store sales fell by more than 4% last quarter, losing $164 million.ĬEO Dave Brandon on Monday called the retail landscape "increasingly challenging and rapidly changing" but said he was confident that the Toys 'R' Us brand will "live on for many generations."
But the trend line is pointing in the wrong direction. Toys 'R' Us noted in a press release that "the vast majority" of its stores are profitable. The company said it plans on keeping its 1,600 Toys 'R' Us and Babies 'R' Us stores open across the world, though the Wall Street Journal reported that the company will eventually close some of its underperforming locations as part of the bankruptcy process. The bankruptcy filing comes just ahead of the holiday season, the busiest time for the year for Toys 'R' Us.
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