These companies will be the biggest winners when Toys R Us closes its stores by Mary Hanbury on Mar 15, 2018, 12:55 PM Advertisement
RIP Toys R Us. On Wednesday, America's best-known toy store informed employees that it would be closing or selling off all of its more than 700 stores in the US. The following morning, it filed liquidation papers. In a conference call with employees on Wednesday, CEO David Brandon partly blamed its downfall on a devastating holiday season, where sales were less than half of the $600 million usually made in a year. The company has lashed out at its competitors, claiming that Walmart, Target, and Amazon created the "perfect storm" to kill off the chain after these stores cut prices on toys during the holiday season. Toys R Us said it could not offer such low margins given that it relies solely on its toy sales. These rival businesses, along with several others, are now set to capitalize on its demise. Find out who below: SEE ALSO: Claire's is reportedly planning to file for bankruptcy as dying American malls claim another victim Walmart  Walmart is the largest toy retailer in the country. In 2017, it doubled down on its efforts to capture more of this market, adding 1,000 new toys to its selection during the holidays, offering exclusive products, and being more competitive on price. Toys R Us said in its liquidation filing that these price cuts were one of the big reasons behind the weak holiday sales that crippled the company. Given its large store base in the US, Walmart is well-positioned to capture the lost foot traffic from Toys R Us stores. It is also the second-largest online toy retailer, following Amazon.
Amazon  Amazon is leading the way in online sales of toys. In 2016, toy sales amounted to $2.16 billion in sales, according to data from Ecommercedb.com. This figure eclipsed sales numbers from Walmart and Toys R Us. Amazon is winning over parents who are ditching stores to shop online for toys. Online retailing has doubled its share — 14.7% of consumers say they now go online to purchase toys, versus 7.3% five years ago, according to a report done by Fung Global Retail & Technology. Amazon wants its customers to know it's getting serious here. This month, it sponsored Khloe Kardashian's over-the-top baby shower. "So grateful to be surrounded by a beautiful support system. And special thank you to @Amazon for helping me bring it all together! ... #AllOnAmazon#AmazonBabyRegistry," Kardashian captioned her Instagram post.
Target  Target was also singled out by Toys R Us as being part of a triumvirate of retailers that contributed most to its declining sales. During the holiday, Target reported stronger-than-expected sales results thanks to surging online sales and more store traffic. While Target does not report its toy sales separately, Reuters reported in January that the lack of other strong retail and online players who sell toys would have helped the company to keep its "loyalists" away from bankrupt Toys R Us. Similar to Walmart, Target has a strong store presence in the US and a growing online platform, which means it's well-positioned to scoop up former Toys R Us customers.
See the rest of the story at Business Insider
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