So, the guys who destroyed Toys’R’Us by loading it down with impossible-to-service debt and then putting in management that was unable to figure out a plan how to be successful as the only toy store in America have decided they may want to try this again.
The company’s “controlling lenders” — at least some portion of the Bain/KKR/Vornado triumvirate that took down the chain earlier this year — announced this week they were pulling the intellectual properties of Toys — the name, the logos, the branding and let’s not forger Geoffrey the Giraffe — from the bankruptcy meltdown with the intention of resurrecting the retailer sometime in the not-too-distant future.
Certainly, the void in the marketplace suggests that their instincts are right, there is a need for a big toy store and given the right financing and business plan it could be quite successful. But do we really think these are the guys to do it? What makes anyone think they will make any better decisions this time around than they did last time?
Of course, the conspiracy theorists among us are thinking this was the plan all along. Dump all that debt, get rid of bad real estate and start with a clean slate. Frankly I’m not sure these guys are that smart…though they certainly are that devious.
The toy industry is already reordering itself and if they are serious about this they better move fast before that black hole closes. But I personally have my doubts about this whole thing. To me it could just be another example of Stupid Greed.
WarrensReport 