Business Wars Toys R US vs KB Toys | Tears 'R' Us | 4
Dec 6, 2023
In 2004, toy retailers are reeling from Walmart’s aggressive pricing, pushing KB Toys to the brink. Toys R Us steps up to battle but finds itself in a fierce struggle for survival as debts pile up and Amazon becomes a rival. With KB Toys declaring bankruptcy, the race to negotiate a comeback begins. As the toy landscape shifts, Toys R Us dreams of revival with plans for flagship stores and innovative locations. Industry experts weigh in, igniting hope for a new era in toy retail.
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KB Toys Bankruptcy Announcement
- In 2004, KB Toys employees gathered in their cafeteria, anticipating bad news after a brutal holiday season.
- CEO Michael Glazer announced the company's Chapter 11 bankruptcy filing due to two consecutive poor holiday seasons and Walmart's price war.
KB Toys' Outdated Model
- KB Toys' business model, reliant on mall-based stores with high rents and discounted older toys, was outdated.
- This outdated model, coupled with Walmart's price war, put the company in a difficult position.
Toy Makers Support Toys R Us
- At the 2004 Toy Fair, toy manufacturers offered Toys R Us exclusive deals on popular toys like Hokey Pokey Elmo.
- This was done to support Toys R Us against Walmart's aggressive pricing and ensure the toy market remains competitive.