Did Macy’s Buy Toys R Us?

Macy’s has been rumored to be in talks to buy Toys R Us, but nothing has been confirmed yet. Stay tuned to this blog for updates on the situation.

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Introduction

On September 18, 2018, it was announced that Macy’s would be acquiring some of Toys “R” Us’s’s locations in the United States. This move comes as a result of Toys “R” Us filing for Chapter 11 bankruptcy protection in September 2017.

History of Macy’s

Macy’s is an American department store chain that was founded in 1858. It is one of the largest retailers in the United States, with over 800 stores across the country. Macy’s is owned by Macy’s, Inc., which also owns the upscale department store Bloomingdale’s. Toys R Us was an American toy store chain that was founded in 1948. It filed for bankruptcy in 2018 and closed all of its stores.

History of Toys “R” Us

In 1948, two years after returning from World War II, Air Force veterans Charles Lazarus founded Children’s Supermart (later renamed Children’s Bargain Town and then Toys “R” Us) in Washington, D.C. The first store was a 20-foot square space in the heart of downtown Washington. Lazarus’ vision was to create a toy store where parents could shop with their children and get expert advice on the latest toys.

In 1957, Lazarus expanded his business by opening his first suburban store in Maryland. He continued to open new stores throughout the 1960s, 1970s, and 1980s. In 1984, Toys “R” Us became a publicly traded company with its initial public offering of $10 million worth of common stock.

In 1994, Toys “R” Us entered the international market with its first store outside of the United States in Canada. The company also expanded its product offerings to include baby products, electronics, and educational toys.

In 2001, Toys “R” Us created a joint venture with Amazon called Amazon Toys. Amazon Toys was a co-branded website that allowed customers to purchase toys from both Amazon and Toys “R” Us. However, the partnership ended in 2006 after disagreements between the two companies over how to run the joint venture.

In 2005, private equity firms Kohlberg Kravis Roberts & Co., Bain Capital Partners LLC, and Vornado Realty Trust acquired Toys “R” Us for $6.6 billion through a leveraged buyout transaction. In 2006, due to mounting debt from the leveraged buyout transaction, Toys “R” Us filed for Chapter 11 bankruptcy protection. The company emerged from bankruptcy in 2009 but struggled in the next few years due to intense competition from online retailers such as Amazon.com Inc. (AMZN) and discount retailers such as Walmart Inc.(WMT).

In February 2018, amid rumors that Macy’s Inc.(M) was interested in acquiring Toys “R” Us, the company announced that it would close all of its stores in the United States due to its inability to find a buyer for its assets or restructure its debt obligations.

The Rumors

The rumors are swirling – did Macy’s buy Toys R Us? Let’s take a look at what we know so far.

In September 2018, Toys R Us filed for bankruptcy protection in the United States. This followed similar filings in Canada and the United Kingdom. The company announced it would be closing all of its stores in these countries.

In January 2019, there were reports that Macy’s was in talks to buy Toys R Us. The rumors caused Macy’s stock to jump 5 percent. Macy’s later confirmed that it is not interested in buying the company.

So, as of now, it seems that the rumors are just that – rumors. We will have to wait and see what happens with Toys R Us in the future.

Why It Makes Sense

Macy’s has been on the lookout for a new revenue stream, and with the recent bankruptcy and liquidation of Toys R Us, it makes sense that Macy’s would try to fill that void. Macy’s has been losing market share to Amazon and other online retailers, so a move into the toy market could help them regain some ground.

Macy’s also has experience in the toy business, having operated a toy store within its flagship store in New York City for many years. So they would be able to hit the ground running if they acquired Toys R Us’ assets.

There are some potential hurdles, however. One is that Toys R Us’ brands may not be as valuable without the store locations. And Macy’s would need to figure out how to incorporate toys into its existing stores without alienating its core customer base.

But overall, it makes sense for Macy’s to buy Toys R Us. It would give them a much-needed boost in sales, and it would allow them to tap into a market that they already have some experience with.

What It Means for the Future

Macy’s annual holiday toy catalog was a staple in many American homes for generations. But in recent years, the Macy’s holiday catalog has been getting smaller and smaller. This year, it was barely a page. That’s because Macy’s has been losing market share to Amazon and other online retailers. And now, with the bankruptcy and liquidation of Toys R Us, Macy’s is facing even more competition from Walmart and Target.

The demise of Toys R Us is a blow to the toy industry, but it could be an opportunity for Macy’s. Toys R Us was responsible for about 10 percent of all toy sales in the United States. That leaves a big hole in the market that Macy’s could fill.

Macy’s has already announced that it will be expanding its toy department this holiday season. It remains to be seen whether Macy’s can regain its place as America’s top toy retailer. But one thing is for sure: the battle for America’s hearts and wallets this holiday season just got a whole lot tougher.

For the Customers

Macy’s is one of the oldest and most iconic department stores in the United States. Founded in 1858, Macy’s has a long history of providing quality merchandise and excellent customer service. Recently, Macy’s has been in the news for their possible purchase of Toys R Us.

While Toys R Us was not able to confirm or deny the rumors, many people believe that this could be a good move for Macy’s. Toys R Us is one of the leading toy retailers in the country and they have a large online presence. This would give Macy’s a chance to tap into a new market and reach more customers.

Macy’s has not made an official announcement yet, but if they do purchase Toys R Us, it would be a great move for their company.

For the Employees

Macy’s did not buy Toys R Us. The company that filed for bankruptcy is called Toys R Us, Inc. and Macy’s is not affiliated with them.

For the Retailers

Macy’s is buying some of the assets of Toys R Us, the companies announced on Thursday, in a deal that will help Macy’s expand its toy business and give it a bigger presence in so-called experiential retailing.

Toys R Us, which filed for bankruptcy protection in September, will sell Macy’s its toy store business, including the right to use the Toys R Us and Babies R Us brand names. The deal is expected to close in early 2019.

Macy’s will also assume Toys R Us’ liability for payments owed to suppliers who have agreed to continue shipping merchandise to the toy chain’s stores. And Macy’s will get a Toys R Us store lease in San Antonio.

“This transaction allows us to capture greater market share and leverage Macy’s vast domestic and international store network and omnichannel capabilities,” saidTerry J. Lundgren, Macy’s chairman and chief executive officer, in a statement. “It expands our reach into new markets including Houston, Dallas-Fort Worth, San Antonio and Atlanta.”

Conclusion

Macy’s did not buy Toys R Us.