March 18 2005

Yahoo! News – Toys R Us Agrees to Buyout Deal

Yahoo! News – Toys R Us Agrees to Buyout Deal

I covered the toy industry for several years as a magazine journalist, so this news fascinates me. In paticular though, this part:

“This is a day that toy manufacturers will be cheering. The last couple years have been bad news for the toy business,” said Jim Silver, publisher of Toy Book and other industry magazines. “This will really make a lot of people very happy.”

Folks..Toys R’ Us was bought by a combination of Kohlberg Kravis Roberts & Co., Bain Capital and Vornado Realty Trust…Kohlberg, Kravis Roberts & Co are famous for being corporate RAIDERS…not saviors…RAIDERS.

You can not honestly believe they are going to leave TRU in it’s current shape. My bet…they want the land. TRU’s sit on traditonally pretty choice pieces of real-estate. Word is already circulating that at least 200 of the stores will probably be bulldozed. I mean, I’m sure it’s just a coincidence that a realty company was on the three companies involved in the buyout.

This doesn’t help the toy industry…that just solidfies Wal-Mart’s hold on their 30% share of the industry, which will now just continue to grow. Add this into the almost complete collapse of FAO Schwarz, the chapter 11 Bankruptcy of KB Toys, Wal-Mart will just continue to get bigger and bigger.

This is NOT good for the toy industry folks, not good at all.

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