The Dying Breed of Toys “R” Us Kids

Toys “R” Us Inc. has abandoned plans for an initial pulic offering after almost three years since the company announced it’s intention to pursue one. The company had first registered for an IPO in May 2010 but has pulled it’s decision due their lackluster performance and a change in management. In the period of a year, Toys “R” Us reported a decrease in profit from $343 million to $239 million; Interest expense and income tax expense increased accordingly.

Toys “R” Us has been hit by the increase of online retailers and the shifting trend away from toys in favor of electronic gadgets. Consumers no longer have to leave their homes to buy any variation of presents; a development which has affected electronic retail giant Best Buy as well. The toy company has a website where constomers can purchase their products but retailers such as Amazon are much more popular and have a greater online presence. The toy company should change it’s marketing strategy if it hopes to regain it’s previous financal status.

Evan Chang

Source:

http://online.wsj.com/article/SB10001424127887324000704578390740125752704.html?mod=WSJ_hp_LEFTWhatsNewsCollection

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