While a crowdfund to save Toys R Us isn’t performing well, one billionaire toy executive isn’t giving up on his dream of rescuing the retailer.
According to USA Today, Isaac Larian, CEO of privately held MGA Enterprises that makes the LOL Surprise dolls, pledged $200 million with other investors to save part of the bankrupt chain. They also set up a crowdfund to raise more money, but that has only garnered $59,000 in three weeks.
While Larian admitted he’s disappointed by the crowdfund's poor performance, he still plans to formally submit a bid this week for more than 300 stores in the U.S. and Canada.
Larian revealed that other toy companies were initially interested but backed down, and he noted that they were clearly thinking about the short term.
The liquidation of Toys R Us “is going to have a long-term effect on the toy business,” he said. “The toy industry is going to suffer.”
Larian revealed that he plans to submit to the bankruptcy court on Friday a formal bid of $675 million to buy 274 Toys R Us stores and use the brand name. The money will come from his own funds, other investors and bank financing. He, along with other investors, also plans to bid $215 million for the Canadian business of 82 stores.
Last month, Toys R Us announced that it was closing its doors for good. The infamous toy retailer once stocked 18,000 different toys in 1,450 global locations, owning a full quarter of the global toy market.
But the company has struggled in recent years, and in 2016, Toys R Us hired a law firm that specialized in corporate restructuring. In 2017, it filed for bankruptcy, planning to use the move as a springboard for a reinvestment plan to get back on its feet.
But while CEO David Brandon had a plan to upgrade online sales, renovate stores and infuse the shopping experience with augmented reality just six months ago, the company was drowning in debt — around $5 billion — and ultimately couldn't recover.