Toys R Us 800 million IPO
ST
(Senior Monkey, 69
Points)
on 5/29/10 at 4:00pm
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Walmart has crushed the Toys
Walmart has crushed the Toys R Us model.
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"I do not think there is any other quality so essential to success of any kind as the quality of perseverance. It overcom
they've crushed far too many
they've crushed far too many models...
coffeebateman wrote: Walmart
Walmart has crushed the Toys R Us model.
Can you explain? Unless you're trying to get a crappy toy, who goes to Wal-Mart to buy toys. If anything I would have guessed that Amazon and other online retailers killed Toys R us. They never embraced the online market until it was too late.
I don't agree with that.
I don't agree with that. Toys R Us is a category killer, i.e. they have every kind of toy under the sun, or at least they used to. Best Buy and Bass Pro Shops / Cabela's strike me as two other "category killers" that specialize in one product and are still doing fairly well, but in their case it is electronics & sporting goods. They just have to get kids to beg their parents to take them to Toys R Us again, maybe take a page out of Chuckie Cheeze's advertising?
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fuking ubs still no dealz on anything
Toys R Us got killed because
Toys R Us got killed because because of high fixed costs and too many indirect competitors. It was not just Wal-Mart that hurt Toys R Us, but Amazon, Ebay, Best Buy, Game Stop, ect. Toys R Us may have every toy under the sun, but it survives by selling the top ten toys of the year/season in bulk to help subsidize the cost of keeping less liquid toys in the store. All of those indirect competitors diluted Toys R Us's market share in those top selling toys and were able to offer better prices than Toys R Us because they were able to specialize and gain a competitive advantage in a particular product.
I loved Toys R Us for two reasons, the RZone and nerf guns. The Rzone was just a small game stop and you had a larger selection of nerf guns online.
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Bottles and DCF Models
Walmart has crushed the Toys R Us model.
Can you explain? Unless you're trying to get a crappy toy, who goes to Wal-Mart to buy toys. If anything I would have guessed that Amazon and other online retailers killed Toys R us. They never embraced the online market until it was too late.
Walmart have just about every brand of toy there is. Go to the Walmart toy section and you'll be surprised just how much variety they have. To boot, when parents drag their kids to Walmart, they get hustled into buying some piece of shit for them and parents prefer picking up toys with their groceries if they do actually buy them.
This was one of the biggest problems for Toys R Us, they just couldn't compete with the convenience of WalMart. Babies R Us is one of the only decent businesses Toys R Us has.
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"I do not think there is any other quality so essential to success of any kind as the quality of perseverance. It overcom
Seems like a fairly
Seems like a fairly transparent GTFO exit strategy for KKR and Bain. Toys R' Us underperformed in the years leading up to the buyout, and every indication would lead one to believe that they're no prize now (shutting down 87 stores, overhauling others to Babies R' Us locations). It'll be really interesting to see the pricing on the IPO in this situation.
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This is what I am talking
This is what I am talking about.... Real deal discussion with disparate, but still very insightful, opinions. A gazillion times better than the monotonous "is GS TMT > MS M&A" threads.... Although perhaps not quite as stimulating as some of the toilet ones...
Keep them coming guys!
Seems odd that they would IPO
Seems odd that they would IPO now with a retail recovery still a ways away (and in the summer, too). I certainly wouldn't buy into it.
Great company: 1. Kids under
Great company:
1. Kids under a certain age (the age when they want to have a lot of low tech toys) cannot shop online.
2. Toy retailers, like clothes retailers, sell products that people want to see and touch before buying.
3. It is a destination. Walmart only sells top toys for holidays, limited selection.
Great real estate.
Toys R Us dominates as a destination for Christmas, Birthdays, etc. Baby's R Us and FAO are big growth areas, currently small --- KKR and Bain kept them on the backburner I guess.
Bank of America Merrill Lynch
Bank of America Merrill Lynch was on the high yield issuance for Toys R' Us last summer. It seems as though KKR bought the company as an Opco/Propco deal, where the real estate was where the true value of the company was. After the subprime debacle, the Babies R' Us business and international expansion has been where the only hope for the company lies. All of the Property Company's assets are now encumbered according to public debt filings.
Bank of America Merrill Lynch
Bank of America Merrill Lynch was on the high yield issuance for Toys R' Us last summer. It seems as though KKR bought the company as an Opco/Propco deal, where the real estate was the true value of the company. After McDonalds, Toys R' Us may be one of the only large stores in the U.S. that owns over 50% of its locations. After the subprime debacle, the Babies R' Us business and international expansion has been where the only hope for the company lies. All of the Property Company's assets are now encumbered according to public debt filings.
Bank of America Merrill Lynch
Bank of America Merrill Lynch was on the high yield issuance for Toys R' Us last summer. It seems as though KKR bought the company as an Opco/Propco deal, where the real estate was the true value of the company. After McDonalds, Toys R' Us may be one of the only large stores in the U.S. that owns over 50% of its locations. After the subprime debacle, the Babies R' Us business and international expansion has been where the only hope for the company lies. All of the Property Company's assets are now encumbered according to public debt filings.
As I understood it, the
As I understood it, the value-add of the Toys R Us model was stuff like this:
http://www.nytimes.com/2009/12/19/business/19toys....
Finding/creating/marketing new categories for popular toys and then cornering the market and enjoying fat margins. Amazon, Wal-Mart, etc, can sell toys, but the value proposition of Toys R Us is employing expertise to be at the vanguard of the toy world trends.
Logan_1987 wrote: This is
In the article it says the 3