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As guessed, Toys R Us’ bankruptcy has led to a business ripple effect

(BUSINESS NEWS) Recently Toys R Us announced bankruptcy but now the toy retailer is seeing the immediate repercussions of being financially unstable.

Toys R Us

RIP my childhood

Toys ‘R’ Us may still consider themselves “the world’s greatest toy store,” but some of their suppliers may not agree.

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The company recently filed for bankruptcy, leaving some retailers wondering how and more importantly if they will be paid, especially since they had already shipped their products.

Falling dominoes

The downfall of Toys ‘R’ Us has left a ripple effect in its wake. As a toy retailer, they won’t be able to afford to have unstocked shelves leading into the holiday season, so out of desperation the company decided to start taking out loans to pay their major retailers.

Toys ‘R’ Us found themselves knee deep in debt from loans that they used to pay top vendors like Mattel and Hasbro. The problem is that they disregarded smaller and perhaps more creative vendors.

Burned that bridge

The CEO of Product Launchers has cut all connections with Toy ‘R’ Us, based on the prediction that her company won’t get paid. She estimates that the toy retailer currently owes her company $1 million.

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Toys ‘R’ Us may be underestimating the sales potential of these smaller companies.

For instance, the $500,000 worth of licensed DC Comic-themed fidget spinners that Product Launchers just delivered could sell out. Smaller companies have more creative flexibility than larger, traditional companies.
Hence, fidget spinners being mentioned every other moment. When is the last time people were that excited about Barbie? However, a major chain like Toys R’ Us still wants to play it safe.

Who knows

The future of Toys ‘R’ Us is still up in the air. Even if they do have stocked shelves for the upcoming season, will it be enough? If they already filed for bankruptcy then something else needs to change besides simply having more products. Some vendors have already seized shipping merchandise to Toys ‘R’ Us until the company is more stable.

Product Launchers prefers to focus on other retailers, particularly ones with more financial stability. They too are taking the safe route and partnering with companies that can offer a long-term commitment, and ideally, ones that will definitely pay them.

#ToysRBroke

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Written By

Natalie is a Staff Writer at The American Genius and co-founded an Austin creative magazine called Almost Real Things. When she is not writing, she spends her time making art, teaching painting classes and confusing people. In addition to pursuing a writing career, Natalie plans on getting her MFA to become a Professor of Fine Art.

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