Toys R Us CEO and other execs leave the company
- Toys R Us CEO Dave Brandon and other members of the leadership team, as well as the "majority" of the retailer's employees, are leaving the company Monday, a Toys R Us spokesperson confirmed to Retail Dive. Brandon and the executives, "fulfilled their professional and fiduciary responsibilities to the company" the spokesperson said in an emailed statement, adding, "Several hundred employees will remain on to assist with the wind-down, which is standard practice for a liquidation process."
- As the bankrupt toy retailer liquidates its U.S. operations, court documents filed last week show it has paid out $320.6 million in lawyers fees since filing for bankruptcy. A legal firm hired by Toys R Us had filed the document in a notification that it was requesting fees paid in February and March that were in excess of a court-set cap.
- The filing comes as some Toys R Us employees are calling on the company to pay its laid off workers severance using the proceeds from fees and other payments made by the company to its private equity owners. A petition by a California Toys R Us employee had nearly 54,000 signatures by Monday morning.
Month by month, Toys R Us is shrinking its footprint in the U.S. as the retailer winds down its domestic business.
It's not necessarily all over for the retailer or its brand in its home country. Both the investment firm that bought its Canadian unit and MGA CEO Isaac Larian have shown interest in saving a fraction of Toys R Us stores in the U.S. But, at the moment, no deal has materialized. Meanwhile, the liquidation grinds on, taking thousands of employees' jobs with it.
It's not clear yet where those employees will go. As thousands of brick-and-mortar stores close, the retail sector has been shedding jobs and trading its sales staff for tech employees to adapt to the rapid expansion of e-commerce. A recent LinkedIn study of its users looked at, among other things, new job titles posted by retail associates displaced in the last five years. Administrative employee topped the list, followed by customer service specialist and those who went back to school. Other titles included food service professional, operations specialist, logistics specialist, marketing specialist, merchandiser and IT support.
Among the roughly 30,000 employees sent adrift by the Toys R Us liquidation, some are finding solace in social media. Eduardo Pena, a former director of real estate for Toys R Us new stores, started a Facebook group for former employees called "Dead Giraffe Society," which is meant as a place to share stories and memories. The name comes from a term coined by a former employee by those let go after the 2005 buyout by Bain, KKR and Vornado. Pena told Retail Dive that he wanted the group to be a "tribute to the folks of the past." The company's liquidation, he said, "doesn't take away the fact that we had a good experience."
The fallout of the retailer's wind-down extends beyond its employees. In a footnote to a court filing last week, Claire's Stores, which filed for bankruptcy in March, said its concessions inside Toys R Us stores accounted for about $59.1 million in revenue and $12.4 million in earnings in 2017.
As the economic ripples of Toys R Us' closure continue spiraling out, expect the saga over the 70-year-old company to continue. Bankruptcy laws tend to favor companies and their most-secured lenders. That leaves a lot of stakeholders, including employees and vendors, to fight over anything leftover.
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