The Study of Toys R Us’ LBO Failure

Abstract

Toys "R" Us used to be one of the biggest international juvenile production firms. However, it continually lost its dominant role in the juvenile market and finally declared bankruptcy in 2018. Through studying Toys "R" Us' financial statement and navigating the strategies it used for improving selling in recent years, the research analyzes several possible reasons for Toys``Toys``R" Us' failure of bankruptcy and also states how the $6.6 billion LBO operated in 2005 should be one of the important decisions among these factors. By concluding previous improper strategy usage, the research also gives some advice for strategies to improve product selling for the firm's following return next year 2022. For KKR, Bain, and Vornado, it is good to make sure that managers of the firm have a good new development plan based on the reliable prediction for the toy market's future. In this new plan, the firm may improve in-store experience and open shops in department stores. But in this research, the brand's future is not clear yet, and can not surely be successful by the suggestions given in this research, due to the unwise decision of LBO made before.