Toys'R'Us closing all UK stores by end of April

I watched something on youtube that said the same. Essentially they borrowed 80% of the value of the company to buy the company and then added that debt to Toys R Us.

It's called a Leveraged Buyout, it's also not a bad board-level decision, it's a tactic to make short term profit at the cost of the whole company.

The company who oversaw the buyout were Bain capital who are run by Mitt Romney.

I think that’s what OpCapita/“Baker Acquisitions” did with GAME. After the buyout, GAME had to pay back the debt run up in buying them, cutting other costs substantially in order to help do this more expediently. It also led agreements with most publishers to buy stock on consignment (meaning it remained the property of, say, Sony, until actually sold), on the proviso that GAME reinforced RRP. It doesn’t mean GAME would otherwise be more competitively priced, but, in effect, they couldn’t be. It was pretty grim. We once had to give a standing ovation to the vultures who acquired the business at conference for “saving” us.

KK wrote:

NickSCFC wrote:Is it possible for another company to come along and use the brand?

I didn't use Toys R Us, but I'd like to see the name on the high streets still, similarly to how I'd like to see Poundland rebrand as Woolworths.

There is precedence for this: The Hut bought the Zavvi name, and Littlewoods/Very purchased Woolworths (which they still own).

Wouldn’t be surprised if somebody purchased Toys R Us.

I'd imagine another toy retailer will buy it to stop somebody else using it. I doubt we'll see the rebirth of Toys R Us any time soon.

As good will gesture they should donate all the toys to poor kids in africa.

grog monster 64 wrote:

I watched something on youtube that said the same. Essentially they borrowed 80% of the value of the company to buy the company and then added that debt to Toys R Us.

It's called a Leveraged Buyout, it's also not a bad board-level decision, it's a tactic to make short term profit at the cost of the whole company.

The company who oversaw the buyout were Bain capital who are run by Mitt Romney.

I think that’s what OpCapita/“Baker Acquisitions” did with GAME. After the buyout, GAME had to pay back the debt run up in buying them, cutting other costs substantially in order to help do this more expediently. It also led agreements with most publishers to buy stock on consignment (meaning it remained the property of, say, Sony, until actually sold), on the proviso that GAME reinforced RRP. It doesn’t mean GAME would otherwise be more competitively priced, but, in effect, they couldn’t be. It was pretty grim. We once had to give a standing ovation to the vultures who acquired the business at conference for “saving” us.

Yep this is becoming a more and more common theme. It’s similar to how the Glaziers bought
Manchester United.

A lot of ‘praised management buyouts’ are done on the same method and rarely work out.