It’s a sad day for kids and grown-up kids alike.
Toys R Us has informed all of its employees that the company was “seeking approval to liquidate inventory” in more than 700 stores across the United States, according to Reuters. Back in January, the toy-seller announced it would close 200 stores as part of a restructuring plan in the wake of their bankruptcy filing back in September 2017. Less than four months after the January announcement, the chain publicized its official closing and mentioned it would either close or sell all remaining stores. The announcement came amid a months-long battle with bankruptcy-related issues and a struggling brick-and-mortar store success rate.
But experts say the store’s demise can’t be blamed on one specific thing. Here are three industry trends that contributed to Toys R Us’s closure, according to NPR:
1. Online retailers are giving brick-and-mortar stores a run for their money.
Online goliaths like Amazon and Walmart offer a convenient and easy way for parents to buy popular toys. With overnight shipping options and a larger inventory than what is housed on store shelves, parents are turning to their phones or tablets to order instead of physically shopping at a store.
2. A majority of toy sales happen during the holiday months.
The “traditional” toy business—like waiting in line at a store or shelling out big bucks for the hot new product—is pretty much limited to the holiday season. According to Jefferies analyst Stephanie Wissink, three-quarters of all toy sales take place during the holiday months.
3. Kids prefer digital gadgets as opposed to traditional toys.
This is due, in part, to a generational shift that has happened over the last few years. Now, more millennials are having children and, in line with their parents’ digital preferences, those children are becoming more tech-savvy.
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