Rest easy, kids. Toys “R” Us isn’t going anywhere, at least not if the makers of Barbie and Transformers have their way.
The toy chain filed for bankruptcy-court protection Monday night, another in a string of specialty retailers felled by Wal-Mart Stores, Amazon.com and the rest of the online onslaught. Toys “R” Us had been hobbled by more than $5 billion in debt, which required over $400 million a year to service.
Yet, the company, which operates about 1,600 stores globally, will likely survive because manufacturers such as Mattel, Hasbro and closely held MGA Entertainment Inc. need the last remaining toy chain. These vendors are eager for whatever remaining leverage they have against the might of Amazon and Wal-Mart, the bane of all companies focused on a single category of shopping.
“Oh my God, they are very important, and people don’t understand,” Isaac Larian, founder and chief executive officer of MGA, said of the toy chain. “That’s the only place where kids can go and just buy toys. There is no toy business without Toys ‘R’ Us.”