Toy chain in SA not hit by crisis
Toys R Us in South Africa‚ Namibia and Zambia are not affected by the toy chain’s liquidating its stores in the United States. “Although these challenges will have ramifications on the global toy landscape‚ it must be clear that Toys R Us and Babies R Us South Africa are a privately owned South African enterprise‚ which merely pays a royalty to utilise the brand names and operates completely independently from its global counterparts‚” marketing manager Nicole Annells said yesterday. Annells said their growth in revenue was “solid”.
“Toys R Us and Babies R Us South Africa have experienced phenomenal growth‚ having opened seven new stores in 2017.” Toys R Us announced late on Wednesday it was liquidating all its stores in the United States. “This is a profoundly sad day for us as well as the millions of kids and families who we have served for the past 70 years‚” chief executive Dave Brandon said. “I am very disappointed with the result‚ but we no longer have the financial support to continue the company’s US operations.” The company did not indicate how many jobs would be lost‚ but it is reported that about 33 000 are at stake. The debt-plagued chain filed for bankruptcy protection in September last year. The company statement said it was exploring strategies for keeping the brand alive‚ including the sale of 200 US stores that could be packaged with its Canadian operations. Started in 1948 amid the postwar US economic boom, Toys R US has 881 stores in US territories and nearly 65 000 employees globally, according to the company’s most recent press release last month. The New Jersey-based company was saddled with debt following a leveraged buyout in 2005 by a consortium that included the KKR Group and Bain Capital. Much like other retailers, Toys R Us has been battered by competition from Amazon and other online retailers. A weak holiday shopping season weighed on the company’s efforts to reorganise, analysts said. GlobalData Retail managing director Neil Saunders blamed the company’s woes on poor leadership. “As the competitive dynamics of the toy market intensified, management failed to respond and evolve. As such, the brand lost relevance, customers and ultimately sales,” Saunders said in a note on Wednesday. “The main tragedy of liquidation will be the extensive loss of jobs. In our view, those on the shop floor have been badly let down by management and those doing financial deals.” Last month, the company’s British business announced plans for an “orderly winddown” of the company’s store portfolio. Toys R Us employs 3 200 people at 100 stores in Britain. The company also said it was pursuing a “going concern” reorganisation and sale process for its Canadian and international operations in Asia and Central Europe, including Germany, Austria and Switzerland. “The company’s international operations in Australia, France, Poland, Portugal and Spain are considering their options in light of this announcement,” it said. – TimesLIVE, AFP