If you were a shopper at Toys R Us, you probably have missed the brand, and you may be asking, did Toys R Us go out of business? 

Growing up in the ’80s and ’90s, the Toys R Us brand stood out and was the only kids’ toys store where you could get anything. 

The retailer had branches in the US and had also established international markets. In the 1990s, the retailer had covered many parts of the world, doubling sales. 

However, the downfall resulting from stiff competition, debts, and low sales turned things around for the once-vibrant seller.

So, did Toys R Us go out of business?

Yes, the once-mighty retailer Toys R Us went out of business by 2021. The retailer filed for bankruptcy in 2017 and 2018 and later closed all the stores in US, Australia, and UK. 

Operations in Africa and Asia were not affected in a bigger way but the store later sold its chains in Europe and Canada to third parties.

Explore with us as we share details about Toys R Us and why the beloved store went out of business.

The History of Toys R US

Toys R Us was styled from “Toys Are Us.” The retail store was founded by Charles P. Lazarus in 1957 and majorly sold baby items like toys, clothing, and baby items. 

Initially, Lazarus specialized in selling baby furniture through his first shop, Children’s Bargaintown, but he decided to venture into kids’ toys.

Toys R Us enjoyed decades of success from the 60s, 70s, 80s, and 90s. During its peak time, the store had 739 US-based stores. On the international markets, it had over 750 stores linked up in the foreign markets. During the peak period, Lazurus company sold toys 20-50% lower than the competitors.

Around 1978, Toys R Us had control of about 5% of the U.S. toy market and raked in about $36 million within the year. In five years, the store had expanded and doubled its initial number of stores to 169, which moved it to controlling 12.5% of the toy market.

The success saw the company venture into selling baby clothing. In the 90s, the store had taken over the toy market, forcing more retailers like  Lionel and Child World to file for bankruptcy. Still, in the ’90s, the momentum to expand internationally picked up.

It began with Japan and Europe, and by 1996, the store had over 55 international stores, with Japan becoming its top overseas market.

Toys R US International Operations

During its peak, Toys R Us was in over 40 countries. It had over 600 international stores, and about 10 licensed stores were outside the US. 

Most of the stores were corporate-owned, while some were owned independently by Toys R Us with a license to a local company.

Operations in Canada

Toys R Us had spread in US, and the expansion into Canada was inevitable. In 198, the retailer announced its presence in Canada. It opened its wholly-owned first international store. The chain had spread in Canada and had 82 stores by 2018.

Even though the company had significantly grown in Canada, the ties to the United States operations meant that the bankruptcy filing also affected the stores in Canada.  

The stores in Canada were sold to Fairfax Financial in 2018, marking the end of the stores in Canada. Currently, Fairfax Financial is still operating the stores using the Toys R Us name.

Operations in Australia

Toys R Us opened its doors in Australia in 1993 and had about 105 stores during its peak. However, in May 2018, the store entered into a voluntary administration, and later in June of the same year, it announced closing all its operations in the country.

Unlike the other countries where new owners acquired the brand, in Australia, the retailer returned in 2022, partnering with Hobby Warehouse to run an online e-commerce website.

Africa and the Middle East Operations

The expansion of the stores in Asia spread to Bahrain,  Kuwait, Egypt, Oman, Qatar, and the United Arab Emirates. In Africa, the stores are in South Africa, Zambia, and Namibia, where they are independent.

The stores in the regions above still operate with those in the Middle East under the Al-Futtaim Group.

Asia Operations

In East Asia and Southern Asia, Toys R Us was established in 1985 by partnering with Fung Retailing, which owned 85% of the shares, while Li & Fung had the remaining shares. Later in 2018, the Hong Kong-based increased their shares to 21 after the retail sale.

The Asian market is still operational, with Fung running all 470 Toys R Us stores. Fung also runs the licensed Macau and Philippines stores.

Presence in Europe

Operations in Europe began in 1985 UK. The retailer grew its presence, but later, in 2018, the operations stopped. Other countries like Poland, Iberia, France, and the Netherlands also had the store, which closed the operations in 2018.

Another company likely bought the store in all the regions where the operations stopped. Most of the buyers still use the name of the mother company.

What Happened to Toys R Us?

The once famous retail store that kicked out competitors, making them declare bankrupt, went in the same direction after staying successful for several decades. Towards the end of the 1990s, new retail shops dealing with similar products began to hit the market.

The stiff competition marked the exodus of the retail struggles. The first competitors before Amazon were Kmart, Walmart, Target, and Costco. The stores had more affordable items than the ones at Toys R Us.

The sales at Toys R Us began to decrease, and the company headed towards debt in billions of dollars while it tried to maintain its operations.

In 2000, the store partnered with Amazon, where they were the only sellers of toys and baby products. The company would pay Amazon $50 million a year and still submit some percentage of the sales to Amazon.

By getting into the partnership with Amazon, the retailer didn’t know that future implications would be complex to turn around. Initially, the partnership was successful, but later, Amazon would branch out and make new partnerships with other competing retailers.

The new partnerships hurt the sales of Toys R Us. While the sales were still doing well despite the competition, Toys R Us used all the revenue from the sales to pay the accumulated debt. 

By 2005,  the company had a huge debt, and the chances of defaulting were huge; hence, the credit score was reduced.

Due to a lack of funds to invest and reinvest in the store, the company’s services worsened, and the reputation decreased. Buyers couldn’t keep up with the understaffed services, so the retail lost its previous glory.

In 2017, the company filed for bankruptcy with a $5 billion and costs of $400 million. Later, in 2018, the stores’ liquidation, selling, and closing began, marking the end of one of the most vibrant retail stores since World War 2.

FAQs

1. Did Amazon Contribute To The Downfall of Toys R Us?

Initially, Toys R Us partnered with Amazon as the only seller of toys and kids’ clothes for a ten-year deal. Later, Amazon would strike deals with competitors, leading to more problems for the already struggling Toys R Us stores.

2. What Is the Meaning of Toys R Us?

Toys R Us is derived from “Toys Are Us” which was one of the leading American retail stores selling toys and kids’ items. The retailer had over 700 stores in the US and about the same number internationally.

3. What Was the Most Famous Slogan By Toys R Us?

The retail store had many slogans, but the most captivating one was “I don’t want to grow up, I’m a Toys R Us kid,” The slogan was relatable; even grownups would buy the toys for themselves as they had sentimental value, reminding them of the 80s.

4. Is Toys R Us Still in Business?

No, Toys R Us is not in business as the main retail shops in the US, UK, Australia, and Canada were closed. The business applied for bankruptcy in 2017 and sold most of its outlets in 2018.  The retailer has since partnered with Macy’s department stores for online sales.

5. What Led to The Fall of Toys R Us?

Toys R Us could not compete in the rising digital space and, hence, experienced a decline in revenue and market share. The changing consumer trends resulting from competitors were difficult to adopt, leading to the fall of Toys R Us.

Conclusion

Did Toys R Us go out of business is a question many toy lovers have asked themselves. Yes, the retailer quit the business and closed some stores while selling others. All the businesses stopped operating in the US, UK, and Australia.

The retailer filed for bankruptcy in 2017, marking the end of the business chain that had been successful for many years.  Sinking into debt, low sales, and stiff competition from upcoming online retail selling the same products were the top factors that led to the fall of Toys R Us.

Will the famous Toys R Us return? The big question many would want to know in the future.