Nostalgia hasn’t translated into dollars in a long-shot effort to crowdfund a future for Toys R Us. Neither did efforts to recruit other toy makers.
A campaign led by a billionaire toy executive who pledged $200 million with other investors in hopes of saving part of the bankrupt chain has foundered, with only $59,000 more raised in three weeks. That includes three pledges of $1,000 each, about two dozen of $101 to $500, and the rest for smaller amounts.
Isaac Larian, CEO of privately held MGA Enterprises that makes the popular LOL Surprise dolls, said other toy companies initially were interested in joining the effort but backed down. Larian, who had said he would use his own money for the bid, called it disappointing and said they were public companies thinking about the short term. But he said Thursday he still plans to formally submit a bid for more than 300 stores in the U.S. and Canada.
The liquidation of Toys R Us “is going to have a long-term effect on the toy business,” he said. “The toy industry is going to suffer.” The company’s trouble has already shaken some big toy makers like Mattel and Hasbro. The planned liquidation would have a bigger impact on smaller toy companies that had relied on the chain more heavily.
Bob Wann, the CEO of private toy company PlayMonster and chairman of the Toy Industry Association trade group, expects a flurry of acquisitions of toy companies but says the industry will be able to regain any lost sales in the next few years.
The Toys R Us effort was a long shot to start with, as Larian touted plans to try to save 400 U.S. stores, or more than half of those set to liquidate in the coming weeks. Larian told The Associated Press he still plans to submit to the bankruptcy court on Friday a formal bid of $675 million to buy 274 Toys R Us stores and use the brand name. The money will come from his own coffers, other investors and bank financing. He, along with other investors, also plans to bid $250 million for the Canadian business of 82 stores.
MGA Entertainment, which also produces the Bratz dolls and Little Tikes and is based in Van Nuys, California, has nearly 1 in every 5 sales of its products rung up at a Toys R Us store.
The liquidation of Toys R Us, which threatens more than 30,000 jobs, would be the end of a company burdened with $5 billion in debt and hurt by shifting currents including online shopping. A hearing at U.S. bankruptcy court in Virginia was scheduled Thursday afternoon.
