Billionaire Starts GoFundMe Page to Save Toys R Us
GoFundMe campaigns have sure helped a lot of independent entrepreneurs to get the kind of money they need for a business. This is what we usually see in an investment crowdfunding. But among the many investment crowdfunders, one seems to stand out- saving Toys “R” Us.
Toys ‘R” Us bankruptcy
Late last year, the toy store empire announced that it will be closing some of its stores due to bankruptcy. The company filed for Chapter 11 bankruptcy that would give them a $5 million wiggle on their long-term debt of $2 million. According to its financial statements, the company has not made an annual profit since the year of 2013. Aside from that, the company’s losses continue to grow with a $164 million loss just by the end of April 2017. Though the bankruptcy was declared last year, the company was working out plans so that not all stores would be closed. They were working on deals and looking for buyers in the hopes of saving the company.
A lot of people were devastated by the news but saw it coming. The bankruptcy of Toys “R” Us and more brick and mortar retailers are seen to be the Amazon effect in play. The highly digitalized way of shopping and purchasing reduced foot traffic in malls and physical stores.
Toys “R” Us Liquidation
Just January of this year, the management announced that they are heading for liquidation which would end up in the closing of 182 of the stores in the U.S. On February, the announcement made 3,200 jobs at risk in the United Kingdom after the announcement was made in the U.S. Just as expected, no later than that, the company announced that they would also begin the liquidation to all of their UK stores.
What became as the biggest shocker, took place on the 15th of March. The plan of closing 182 stores in the U.S. instantly escalated. They announced that all of the stores in the country are closing including the stores located in Puerto Rico.
But what set out to become one of the saddest times for the company became an inspiration for a wealthy businessman to take action.
A person who spends enough time on Twitter may have noticed that the hashtag #SaveToysRUs became one of the trending topics after they announced the liquidation. The hashtag was even tweeted by a billionaire Isaac Larian. Larian is the owner MGA Entertainment, one of the most successful and profitable toy companies in the U.S. The company is the manufacturer of the Bratz Dolls and owner of Little Tikes. Larian’s devastation made him tweet to fellow toy companies like Disney and Lego to help Toys “R” Us save its legacy. He even tweeted to U.S. President Donald Trump and his daughter Ivanka to also help since a lot of employees would become jobless once the closing starts. Though thoughtful, Isaac’s tweet did not get the warm welcome he imagined. And that’s when he turned to crowdfunding.
Isaac Larian found a way to help the toy company by setting up its own GoFundMe campaign. To make things faster, Larian became its first donor along with unnamed investors and the amount they accumulated went up as high as $200 million. They also encouraged fans and adults who were once Toys “R” Us kids to donate any amount as a way to say thank you to the toy-filled childhood the company gave them. Investors or donors would not be given a share in the company but Isaac promised cool stuff in return. Such gifts included Bratz dolls, a Toys “R” Us item of their choice, or a signed note by Isaac himself. They have already received $4,000 from 130 donors and they’re still counting on more help to pour in. Isaac remains optimistic and still aims to reach the target amount of $1 billion.
Along with its sad news, another storm hit the company as Charles Lazarus died seven days after the announcement. Lazarus founded the company in 1948 when it started out as a humble baby furniture store. His dedication and brilliance became the key to how he transformed his small business to become one of the biggest toy stores across the globe. He retired as the company’s CEO in 1994 but he still continued to serve the company as the chairman emeritus.
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