As expected when it filed for bankruptcy protection last summer, struggling toy retailer Toys ‘R’ Us is closing an enormous number of stores, 180 stores to be specific or nearly 20% of its fleet, as it tries to get back to being a viable chain.
Toys ‘R’ Us on Monday night asked federal bankruptcy court in Richmond, Virginia for permission to close those stores, saying it has “faced a challenging commercial environment” made worse, it claimed, by consumer preferences to online stores from brick and mortar stores.
The company had been weighed down by enormous debt levels – $5 billion pre-bankruptcy, and years of weak sales as business did indeed defect to Amazon.com (AMZN), but also to major chains like Target (TGT) and Walmart (WMT), which have proven far more adept at withstanding competition from Amazon but also made their toy offerings far more enticing.
And those problems have persisted. In a memo to staff obtained by Bloomberg News, Toys ‘R’ Us CEO Dave Brandon said the holiday season had been “very challenging.” That followed a third quarter when comparable sales fell 7% in the United States as the turmoil of the bankruptcy exacerbated its already stumbling business. Through the first three quarters of this fiscal year, the chain had a net lost of $862 million.
The closures, which include one in its hometown of Wayne, N.J., will begin in February and conclude by April and nearly half of the locations will be Babies ‘R’ Us stores. Baby products generated 45% of company revenues in the first nine months of the fiscal year.
Much like the steady drumbeat of Sears (SHLD) store closings in recent years have been a boon for rivals like J.C. Penney (JCP) and Home Depot (HD), Toys ‘R’ Us will be turning over quite a bit of market share.
The stores generated $925 million last year, according to court filings, and Toys ‘R’ Us likely won’t be keeping much of that business. Jefferies analyst Stephanie Wissink said in a research note on Wednesday that the Toys ‘R’ Us website or a nearby store would help the company hang on to about 10% to 15% of sales at shuttered locations. (Those figures stand up- Macy’s (M), which last year closed nearly 70 stores, has said other stores and its web site capture about 12% of a store’s sales when it closes a location.) Beyond that, Walmart should get about 30% of that, while Amazon would get as much as 40%.
Target, which called out toys as a key category in its good holiday season numbers, will also win some share: UBS noted that 630 Toys R Us are within a 15-min drive from a Target, making it “well-positioned to take share.” Even more pressure could come as non traditional toy sellers like J.C. Penney and continue to step up their toys game.</p> <p>Meanwhile, these retailers will likely have even more clout with toymakers with a big reliance on Toys ‘R’ Us, including [hotlink]Mattel (MAT), Hasbro (HAS) and Jakks Pacific (JAKK), key to negotiating more exclusive products.
In the meantime, the move is aimed at helping Toys ‘R’ Us focus its efforts on areas where it is hoping to stage a comeback. But it has a long way to go, according to many observers. “Toys R Us failed because it’s a poor retailer, operating terrible stores, and was rarely the lowest on price,” Neil Saunders, Managing Director of GlobalData Retail, said on Twitter.
Or, looked at properly, the vast majority of toy sales are offline. Toys R Us failed because it’s a poor retailer, operating terrible stores, and was rarely the lowest on price. The “internet stole my lunch” narrative is wearing a little thin. Https://t.co/qKOF8Pq7GK
— Neil Saunders (@NeilRetail) January 24, 2018
These are the Toys ‘R’ Us stores set to close, pending court approval:
Alabama
2600 McFarland Blvd. East, Tuscaloosa AL
335 Summit Blvd., Birmingham AL
Arizona
801 W. 32nd Street, Yuma AZ
12801 North Tatum Blvd., Paradise Valley AZ
9139 Indian Bend Rd., Scottsdale 4619 N. Oracle Rd., Tucson AZ
7000 E. Mayo Blvd., Scottsdale AZ
US 60 and Signal Butte Rd., Mesa AZ
Arkansas
2616 S. Shackleford Rd., Little Rock AR
California
42500 Jackson St., Indio CA
1189 Simi Town Ctr. Way, Simi Valley CA
26573 Carl Boyer Dr., Santa Clarita CA
960 Lakes Dr., Covina CA
1600 S. Azusa Ave., Puente Hills CA
2575 E. Imperial Highway, Brea CA
530 Westminster Mall, Westminster CA
20120 Hawthorne Blvd., Torrance CA
2550 Canyon Springs Pkwy S., Riverside CA
700 “A” Onstott Rd., Yuba City CA
2785 E. Bidwell St., Folsom CA
1330 Fitzgerald, Pinole CA
4505 Century Blvd., Pittsburg CA
600 Francisco Blvd., San Rafael CA
5461 Lone Tree Way, Brentwood CA
1400 Gateway Blvd., Fairfield CA
3938 Horton, Emeryville CA
2179 Monterey Hwy., E. San Jose CA
865 Blossom Hill Rd., San Jose / Almade CA
3520 W. Shaw Ave., Fresno CA
31250 Court House Dr., Union City CA
10640 Trinity Pkwy., Stockton CA
3900 Bristol Street, Santa Ana CA
3665 Grand Oaks, Corona CA
1240 W. Morena Blvd., Mission Bay CA
8181 Mira Mesa Blvd., Mira Mesa CA
1990 University Drive, Vista CA
Colorado
1150 S. Ironton, Aurora CO
Connecticut
376 North Universal Drive, North Haven CT
275 Union St., Waterbury CT
3491 Berlin Turnpike, Newington CT
169 Hale Road, Manchester CT
Delaware
1061 N. Dupont Highway, Dover DE
Florida
1625 Apalachee Pkwy., Tallahassee FL
1900 Tyrone Blvd., St. Petersburg FL
3908 West Hillsborough Avenue, Tampa FL
6001 Argyle Forest Blvd., Orange Park FL
Spring 708 West State Rd. 436, Altamonte FL
21697 State Road #7, Boca Raton FL
10732 SW Village Pkwy., Port St. Lucie FL
450 South SR 7, Royal Palm Beach FL
2601 W.Osceola Parkway, Kissimmee FL
6001 West Sample Road, Coral Springs FL
3214 N John Young Pkwy., Kissimmee FL
Georgia
2601 Dawson Rd., Albany GA
2955 Cobb Parkway, Smyrna GA
6380 No. Point Parkway, Alpharetta GA
1155 Mt. Vernon Hwy., Dunwoody GA
6875 Douglas Boulevard, Douglasville GA
8160 Mall Parkway, Conyers GA
221 Newnan Crossing Bypass, Newnan GA
132 Pavilion Parkway, Fayetteville GA
Indiana
3928 E 82nd Street, Indianapolis IN
8800 US 31 South, Greenwood IN
Iowa
1211 E. Army Post Rd., S. Des Moines IA
8801 University Ave., Des Moines IA
Illinois
1610 Deerfield Rd., Highland Park IL
16 East Golf Rd., Schaumburg IL
295 Center Drive, Vernon Hills IL
5001 Lincoln Highway, Matteson IL
6420 W. Fullerton, Bricktown IL
7750 South Cicero Avenue, Burbank IL
5660 Touhy Avenue, Niles IL
Kansas
4646 W. Kellogg, Wichita KS
8500 W 135th Street, Overland Park KS
Kentucky
4900 Shelbyville Rd., St. Mathews KY
1155 Buck Creek Rd., Simpsonville KY
1965 Star Shoot Parkway, Lexington KY
Louisiana
137 Northshore Blvd., Slidell LA
Maine
6 Bangor Mall Blvd., Bangor ME
200 Running Hill Road, Portland ME
Maryland
8401 Mike Shapiro Drive, Clinton MD
Massachusetts
302 Providence, Dedham MA
70 Worcester Providence Tpk/Rt. 146, Millbury MA
50 Holyoke Street, Holyoke MA
217 Hartford Ave., Bellingham MA
6110 Shops Way, Northborough MA
Shoppers World Plaza, 1 Worcester Road, Framingham MA
Michigan
5363 Harvey Street, Muskegon MI
2620 Crossing Circle, Traverse City MI
5900 W. Saginaw Highway, Lansing MI
4923 28th Street South East, Grand Rapids MI
3725 Carpenter Road, Ann Arbor MI
3725 Washtenaw, Ann Arbor MI
Minnesota
14100 Wayzata Blvd., Minnetonka MN
170 89th Ave., Blaine MN
8236 Tamarack Village, Woodbury MN
900 West 78th Street South, Richfield MN
Mississippi
1003 Bonita Lakes Circle, Meridian MS
200 Bass Pro Dr., Pearl MS
Missouri
1901 Bernadette, Columbia MO
201 Silver Springs Rd., Cape Girardeau MO
5590 St. Louis Mills Blvd., Bridgeton MO
220 THF Blvd., Chesterfield MO
Nebraska
3505 S. 140th Plaza, Omaha NE
Nevada
2150 North Rainbow Blvd., Las Vegas NV
7020 Arroyo Crossing Parkway, Spring Valley NV
New Mexico
45 Hotel Circle, Albuquerque NM
North Carolina
801 Fairview Road, Asheville NC
7001 Fayetteville Road, Durham NC
3300 Westgate Drive, Durham NC
New Hampshire
29 Gusabel Avenue, Nashua NH
New Jersey
1280 Rt. 22 & St. James Ave., Phillipsburg NJ
137 Route 35, Eatontown NJ
100 Promenade Blvd., Bridgewater NJ
2700 Route 22 East., Union NJ
909 US Hwy 1 South., North Brunswick NJ
Rt. 541 & Cadillac Road, Burlington NJ
2135 Route 38, Cherry Hill NJ
7 Wayne Hills Mall, Wayne NJ
545 Route 17 South, Paramus NJ
98 Route 10 West., East Hanover NJ
Kids World 900 Center Drive, Elizabeth NJ
50 International Drive South, Mt. Olive NJ
New York
139-19 20th Ave., College Point NY
24-30 Union Square E, Union Square NY
5181 Sunrise Hwy., Sayville NY
5214 Sunrise Hwy., Massapequa NY
2335 Marketplace Drive, Henrietta NY
1569 Niagara Falls Blvd., Buffalo NY
401 Frank Sottile Boulevard, Kingston NY
708 Upper Glen St., Glens Falls NY
221 Wade Road Extension, Latham NY
2700 Central Park Ave., Yonkers NY
66 Metropolitan Ave., Middle Village NY
1350 Corporate Drive, Westbury NY
108 Veterans Memorial Highway, Commack NY
461 Lycoming Mall Cir, Williamsport NY
1530 Ridge Rd. West, Greece NY
Ohio
6251 Glenway Ave., Western Hills OH
2661 Miamisburg-Centerville Rd., Dayton OH
7841 Mentor Ave., Mentor OH
3610 West Dublin-Granville Rd., Dublin OH
Oklahoma
1119 SE 66th St., Oklahoma City OK
5609-E Rogers Ave., Fort Smith OK
560 Ed Noble Pkwy., Norman OK
Pennsylvania
100 Welsh Road, Horsham PA
6680 Peach St., Erie PA
3700 William Penn Highway, Monroeville PA
104 Bartlett Ave., Exton PA
2003 Cheryl Dr., Ross Park Mall PA
301 Oakspring Road, Washington PA
18/Valley View Dr., Beaver Valley Route PA
Rhode Island
300 Quaker Lane, Warwick RI
South Carolina
254 Harbison Boulevard, Columbia SC
South Dakota
450 E. Disk Drive, Rapid City SD
Tennessee
7676 Polo Ground Blvd., Memphis TN
5731 Nolensville Rd., Nashville TN
Texas
801 Mesa Hills Dr., West El Paso TX
9730 Katy Freeway, Houston TX
170 E. Stacy Road, Allen TX
7730 N. MacArthur Blvd, Irving TX
420 E. Round Grove Rd., Lewisville TX
13710 Dallas Parkway, Dallas Galleria TX
1309 W. Pipeline Rd., Hurst TX
5800 Overton Ridge Blvd., Hulen TX
Utah
4042 Riverdale Rd., Ogden UT
1122 Fort Union Boulevard, Midvale UT
Virginia
14173 Crossing Place, Potomac Mills VA
12153 Jefferson Ave., Newport News VA
Washington
3567 N.W. Randall Way, Silverdale WA
1325A S.E. Everett Mall Parkway, Everett WA
6104 N. Division Street, Spokane WA
Wisconsin
18550 W. Bluemound Rd., Brookfield WI
2161 Zeier Road, Madison WI
