by Tina Manzer
MGA Entertainment CEO Isaac Larian recently announced he is putting $200 million ($100 million of his own money and another $100 million from unidentified investors) into a last-ditch effort to buy Toys “R” Us. Meanwhile, store liquidations have already begun.
Unlike the announcement a week earlier from Ellia Kassoff regarding the revival of K-B Toys to save the toy industry, Larian’s plans include “saving” Toys “R” Us only.
Van Nuys, California-based MGA Entertainment is the maker of Bratz dolls and Little Tikes toys.
As a March 28 article in the Los Angeles Times pointed out, “Larian needs hundreds of millions of dollars more to save the 200 to 400 U.S. stores he would like to combine with 82 Canadian stores still in operation – if the Bankruptcy Court would even approve that request.”
Maybe the money will come from his #SaveToysRUs GoFundMe campaign. For funders, the website states clearly that it is neither a tax-deductible charitable donation nor an actual investment. “A donation to this campaign doesn’t qualify you to claim equity in any potential acquisition; it simply means you want future generations to be Toys ‘R’ Us kids.”
Larian says he has until early May at the latest to get the deal done, according to the LA Times.
Meanwhile, no one – including Larian – seems to be aware that there are successful toy stores in operation on this planet. Learning Express recently issued a statement pointing to an industry full of them. Among other things, it said:
“Larian recently stated that, ‘If there is no Toys ‘R’ Us, I don’t think there is a toy business.’ From a manufacturer’s perspective, Larian’s comment may have validity. However, toy retailers have been in business long before Toys ‘R’ Us ever opened its doors, and thousands of independent toy and toy/gift retailers continue to thrive today. There will always be a toy business, although it may look different in the future. The toy departments in big box stores will expand and independent stores may add select, traditionally ‘mass-market’ products to their mix to round out their assortments.
“For decades, independent toy retailers have offered an intelligent alternative to aisles of pink or black. Sharon DiMinico, founder and CEO of Learning Express Toys, explains why mom and pop toy stores have survived throughout the growth of mass market retailers and online shopping. ‘Specialty toy retailers are able to offer an in-store experience and service that can’t be replicated by ‘big box’ stores. It is the product assortment, service, and experience that has enabled independent toy stores to remain successful for all these years.’”
Thanks for your fine, thoughtful article.
Tina – I had not heard this perspective on this issue. Extremely enlightening. An excellent article. Thank you for your investigative journalism on the different business angles.