Why Did Toys-R-Us Go Out of Business?

Closing their Doors

After existing for many decades, the large toy company “Toys-R-Us” is closing its doors. This leaves over 31,000 employees without jobs, and many older generations feeling the pain of a nostalgic icon becoming no more. But where did all of this come from? While they did mention closing one-fifth of their stores back in January, it didn’t seem like their situation was that dire. What really went on? And what sort of factors played a part in the closure of this mega toy chain?

toys r us, closing, marketing strategy


Toys-R-Us had an issue with debt for years it seems. As far back as January 2005, Toys R Us had a hard time managing their monetary resources. This isn’t a new story. After all, many companies have gotten into debt at around this time period.

But, it seemed every effort they made into paying off that debt only made things worse. According to one article in Forbes.com  “In 2005 KKR and Bain Capital (which included former Presidential candidate Mitt Romney) bought Toys R Us for about $6.6billion, plus assuming just under $1B of debt, for a total valuation of $7.5billion.  But the private equity guys didn’t buy the company with equity.  They only put in $1.3billion and used the company’s assets to raise $5.3billion in additional debt, making total debt a whopping $6.2B. ”

Any money that was acquired from then on went towards paying the debt and only the debt, which left stores untended to and staff members underpaid and overworked.  This invoked a chain reaction of shoppers not being pleased with the environment, hurting the revenue of the business, and repeating the never-ending cycle of debt all over again.

In 2017, they tried declaring bankruptcy to consolidate the resources they had and use them to reinvest in the company. However, it was too late. They owed too much money and had to liquidate all assets.


Competition in the marketplace is a good thing. It provides customers a way to exercise their freedoms through choosing what to purchase or where to purchase an item. The unfortunate downside for companies when it comes to competition, however, is that there is always a loser involved. Some companies will last because they can adapt, while others will become a casualty of the rat race.  Toys R Us became the loser in a competing market.

When Walmart and Target started to grow in popularity, Hasbro and Mattel had sold just as much product to them, as they did to the Toys-R-Us chain. Also, Walmart/Target both had the advantage of placement. They had their toys in the same place that mothers would buy groceries and home appliances. All they had to do was add competitive pricing to blow away the competition.

Then the rise of Amazon came. With people willing to pay a little more for shipping in order to shop conveniently at home in their pajamas, Toys R US lost even more of their market share to the competition.

Between those three giants, they would net big losses on top of the debt they were in, and the lack of revenue from customers who weren’t thrilled with a dingy warehouse-setting and overworked staff.

Lack of Brand Awareness

brand awareness, toys r us, closing

Do me a favor, and think real hard. When was the last time that you have seen a Toy’s R Us commercial? Because I think maybe I remember seeing one at around Christmas time in 2008.And even then I was shocked that they were playing an out of date commercial.  Sure, kids of yesteryear remember the store chain, it was a huge part of their childhood. But what do the kids today know of that brand? Do they even know what a Toys -R-Us is? Or that its mascot is a giraffe? What about the jingle? Sure, Toys R Us does technically have a website but I didn’t know about it until I checked to see if there was a .com attached to that web address. This is proof of another one of the contributions to their downfall, the fact that there is no brand awareness of their company at all.

They have not actively stated who they were or what they did to the up and coming generation, literally leaving the kids clueless about the fact that their toy store company existed in the first place.

They say in the business world that it is better for people to hate your business than for them to be indifferent to it. That’s because indifference means that no one cares enough to even bother with your business in the first place.

It is no good for a brand to simply exist. If it exists with no marketing strategy then it will die a slow and painful death from a lack of public awareness, just like Toys R Us.

This post was brought to you by Purple Tie Guys, the best in Huntsville/Decatur marketing strategy. Do you want to know more about brand awareness? Click here! If you want to book an appointment to make your business visible today, Head here and Click on the Pop up!

By | 2018-03-16T13:02:04+00:00 March 16th, 2018|Post|0 Comments

Brands, Memes, and Marketing

Are Brands and Memes all that Different?

Anyone in the marketing field worth their salt would know the definition of a brand on the top of their head. A brand is an image or slogan designed to promote a product or service.  It is an assigned identity given to a company for the public to identify with via visual or audio shorthand. When those in marketing who do their job well, people would only have to hear a few notes of a jingle or see a specific image to immediately know how to define a company. What if I were to tell you that memes, by definition, aren’t all that much different from brands.

For those who are unaware of meme culture, they would define memes as “funny internet pictures”. While it covers how the internet defines a meme, it is only a small fraction of the definition. It has a grander purpose and is defined by a cultural phenomenon that predates the internet.


kilroy memes and branding

What is a Meme?

The term meme was coined by Richard Dawkins in his 1976 book, The Selfish Gene. A portmanteau of gene and the Greek word mimeme ( meaning roughly “imitated thing”), the word meme is defined as an idea, behavior, or style that spreads from person to person within a culture—often with the aim of conveying a particular phenomenon, theme, or meaning represented by the meme. This serves the purpose of carrying, replicating, and dispersing information of cultural value from person to person as a form of natural selection.  Also, these ideas, just like the people who are sharing them, can grow and evolve. This is done to suit the needs of the culture carrying the information.

Anything can be a meme, and it doesn’t have to be limited to the internet to spread. Take, for instance, Kilroy, a meme that got its start as a private joke between WW2 soldiers out on the battlefield.  All that is required to make a meme is for someone to create a message that other people identify with and a vehicle for that message to spread.

Why are Memes Associated with the Internet?

When the internet became the most popular method of sharing and altering information, memes exploded.

meme brand culture

Many people who visited the same forums and websites started to create, alter,  and recycle inside jokes in the form of images and slogans to create a sense of community. These forums like 4Chan were somewhat niche and were mostly reserved for nerds, loners, and creatives. The would get on their computers making jokes with a brand of creativity that only people with too much time on their hands could possibly come up with.

Then, came the rise of social media, like Facebook, Twitter, and Instagram which added a whole new level of connectivity. This expanded the popularity of memes where it escaped its niche origins and became more visible to the public eye.   The more popular a meme is, the faster it would spread onto public consciousness until the meme runs its course and is replaced by a new one.

When a message or a joke can spread like wildfire over the internet, people are going to take notice. Including high-end advertisers that are paid to come up with creative and popular ways to sell a product.


Can you Integrate Memes and Brands?

There are already some striking similarities between viral memes and popular brands. Both of them rely on people understanding an image or a slogan to represent their concept, both of them are created for people to share and consume, and both of them are culturally inclusive. The only

wheres the beef, memes, ads, advertising, marketing

difference between the two is that brands exist to connect with people to sell a product. Memes exist only as a cultural connection.

Can a brand be a meme? Yes. The most popular advertising slogans can be considered memes of the time. One example that comes to mind is Wendy’s 1980’s commercial campaign of  a little old lady asking, “Where’s the Beef?” It’s quick, catchy, funny, and people who watched that commercial in America during the 80’s are in on the joke. Another is the “Got Milk?” Ad. People still joke about it today or reference it in popular media.

Can you integrate memes with a brand? It’s possible but it must be done in the right context. Memes, like brands, stand for a particular idea or meaning and have a specific sense of humor. If you try to use it like an out of touch principal speaking outdated slang, the consequences of that campaign could be cringe-inducing.

There are a plethora of good and bad examples of companies that try to integrate memes into their marketing strategy. I will go over them into more detail in the next post!

This post was brought to you by the best of Alabama Marketing, the Purple Tie Guys! If you want to read more stuff like this, click here! If you want to contact us, click the call button on the homepage!

By | 2018-03-02T13:08:30+00:00 March 2nd, 2018|Post|Comments Off on Brands, Memes, and Marketing