One former Toys “R” Us chief executive officer is looking to salvage the company.
In September of last year, news broke that Toys “R” Us may be looking to file for bankruptcy due to its inability to manage its debt, and it didn’t take long until the company made the move. This allowed the group to restructure its $400 million debt. The stores, however, continued to operate during the holiday shopping season, but by March of this year, it was announced that all shops in the United Kingdom will close, followed by locations in the United States. But it seems like there’s still hope that the famed toy store chain won’t completely disappear.
Bloomberg reports that former CEO of Toys ‘R’ Us, Jerry Storch is looking for a way to revive the now-defunct company. Citing sources who are familiar with the matter who requested to remain anonymous given that the talks are private, Storch is using Credit Suisse Group AG as his financial adviser with involvement from Fairfax Financial Holdings Ltd., which, ironically, is the investment firm that bought the Canadian unit of the famed toy store. Fairfax, Toys “R” Us, and Storch have declined to comment, while Credit Suisse hasn’t responded yet.
On top of coordinating with other executives, Storch is also, apparently, reaching out to shopping center landlords about leasing their spaces, but it won’t be a walk in the park for him. First, Storch and his team would have to win a bankruptcy auction for the company’s intellectual party that would take place sometime next month. And even if he successfully win it, it’s doubtful if the chain store will be up and running in time for this year’s holiday shopping season.
Despite the uphill battle to restore the toy company to its former glory, Storch would actually be the perfect guy for the job. Taking over the chain after Bain Capital, KKR & Co., and Vornado Realty Trust 2005 deal, the business reached $1 billion in earnings before interest, taxes, depreciation, and amortization. – a level of performance that Toys “R” wasn’t able to replicate after Storch left the organization in 2013.
Considering his good track record with Toys “R” Us, the businessman’s approach mines inspiration from his previous plan of action – to establish several hundred stores that will both have toy and baby brands in one location. This way, families with children of varying ages will only have to visit a single store and find everything they need there. Last year, there were about 200 hybrid shops around the country, and if Storch succeeds in the auction, people can expect more of them moving forward.
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