Toys R Us Reaps Whirlwind

This week, Toys R Us anncounced that they will be closing or selling all of their stores, effectively liquidating. Their Chapter 11 Banruptcy will almost certainly become a Chapter 7 liquidation, which means that the brand, as we know it, is done. The WaPo, surprisingly, has an insightful piece on the downfall of Toys R Us. In their public announcement, TRU said:

The decrease of birthrates in countries where we operate could negatively affect our business. Most of our end-customers are newborns and children and, as a result, our revenue are dependent on the birthrates in countries where we operate. In recent years, many countries’ birthrates have dropped or stagnated as their population ages, and education and income levels increase. A continued and significant decline in the number of newborns and children in these countries could have a material adverse effect on our operating results.

Andrew Van Dam of the WP adds:

It may not have been the biggest existential threat confronting Geoffrey the Giraffe (the store’s mascot), but it’s the one with the broadest implications outside of the worlds of toys and malls.

Measured as a share of overall population, U.S. births have fallen steadily since the Great Recession. They hit their lowest point on record in 2016 — the most recent year for which the Centers for Disease Control and Prevention has comparable data.

What IS interesting is that, for many years, TRU supported Planned Parenthood; they ended that support in 2010.

In other words, over the course of decades, TRU provided financial support for a cause that served to erode their market base.

Sow the wind..reap the whirlwind.

4 thoughts on “Toys R Us Reaps Whirlwind

  1. Toys “R” Us was my first employer. While it is sad to see them go out of business, they’ve reaped what they’ve sowed for their past support for Planned Parenthood.

  2. It still surprises me how few people make the connection between abortion, contraception and the death-by-aging of the First World. Lee Kwan Yew did when it came to Singapore, but by the time he realized it, his country was already in a death spiral.

    • The teacher unions do the same thing: they have been longtime supporters of abortion. This has killed off many students who would provide greater demand for more teachers, as well as workers whose taxes would fund the schools.

  3. Neither abortion nor planned parenthood have much to do with the decline in the number of babies, Abortion has been in steady decline for decades and if say all abortion were to stop and there was no improvement in birth control usage, we’d hit replacement fertility

    Population aging, urbanization and a simple lack of desire for large families is more the culprit

    Also not the fertility rate, that is children per couple was at below replacement in the 30’s, before common birth control easy divorce or legal abortion and has been in some degree of decline since the 19th century. More years have been spent below replacement than at it

    Its possible the baby boom was an anomaly and that modernity itself leads to smaller families

    The only take away is don’t grow to fast, don’t take on debt and study your market better if you want to last as a company

    Toys are Us failed on all those counts

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