What Does the Toys R Us Liquidation Say About the Future of Local Retail?

Toys R Us

While many factors went into the bankruptcy of heritage retailer Toys R US, experts say this is not the beginning of the end for brick-and-mortar stores, Newsradio 1200 WOAI reports

The chain was saddled with nearly $8 billion in debt, dating to a 2005 leveraged buyout, and Rice University Marketing Professor Utpal Dholakia says that prevented them from investing in their cyber sales at a time when a growing number of shoppers get all their gifts online.

"Every retailer is facing this issue of online retail, but many of them are reacting in very progressive ways," he tells Newsradio 1200 WOAI.

He points to Target and Walmart, which had the capitol to invest heavily on their online presence, and continue to thrive in the marketplace.

It was revealed this week that Toys R Us is planning to close all 800 of its stores after being a market leader for six decades.  It's believed that will affecting as many as 33,000 jobs.

But on top of their debt, their demise is also being blamed on their bitter clinging to an outdated business model.

Baylor Marketing Professor Jim Roberts is quick to pump the brakes on the idea that traditional stores cannot survive.  He compares Toys R Us to many of the heritage car companies.

"They're kind of jumping on the electric cars and things now, but they don’t make cars, they're in the transportation business, and when they define themselves as such, then they would have seen electric cars as an opportunity, not a threat."

He says television networks have successfully pivoted to being content creators in a world where many viewers are streaming and downloading instead of changing the channel.

"It's about how you define who you are or what you do," he explains.  "You're not what you produce, but you are the problem you solve."

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