Just recently, Toys R Us announced that 200 stores around the globe are closing. The company filed for bankruptcy back in September, and announced in January that it would be closing down. As of the most recent report, 31,000 employees will be losing their jobs. The kicker is that they won’t be receiving severance.
For many kids and adults alike, the news is shocking. Obviously, children are upset that their favorite toy store is closing, but even adults are taking to social media, reminiscing about childhood memories born from the chain. Toys R Us has a long running history for selling toys, as it opened back in 1948 selling cribs, strollers, and other baby items. According to CNN, “The chain has struggled as shoppers move online . . . And as video games and other high-tech toys grow in popularity” (Toys).
In a sense, Toys R Us itself was also a factor of the company closing. The company filed for bankruptcy in September, instead of after the holiday season. For retailers, holiday season is a huge source of yearly income. The bankruptcy statement was a huge distraction for the company, as they weren’t able to focus as much on advertising their holiday deals. When the news of the chain’s bankruptcy out to the public, competitors sold their toys even more aggressively. Companies like Target and Walmart “priced toys "at low-margins or as loss-leaders" during the holiday shopping season and offered aggressive online shipping options” (Reasons). Toys R Us had no chance of surviving the holidays with competitor prices, especially because they rely solely on toys for profit.
For the employees of Toys R Us, the news is even more devastating, as they won’t receive any severance pay. Because of bankruptcy laws, 401k benefits and health insurance are lost. Employees will have no job and no benefits. The laid-off employees will still have 60 days of pay, but some employees will still be required to work past two months to close down operations. However, there is hope. The job market at the moment is promising, as the unemployment rate is at an a 17 year low of 4.71%, and lots of retailers are in dire need of employees.
While the famous toy retailer might be closing down for good, the name will live on in many hearts. Kids will still have options for purchasing toys, but nothing will come close to the magic and nostalgia of Toys R Us.
Bomey, Nathan. “5 reasons Toys R Us failed to survive bankruptcy.” USA Today, Gannett Satellite Information Network, 18 Mar. 2018, www.usatoday.com/story/money/2018/03/18/toys-r-us-bankruptcy-liquidation/436176002/.
Many employees told CNN the shutdown caught them surprise. “31,000 Toys 'R' Us employees: No job and no severance.” CNNMoney, Cable News Network, money.cnn.com/2018/03/16/news/companies/toys-r-us-employees/index.html.