I remember talking to Toys R Us CEO Dave Brandon more than two years ago.
He was five months into taking over as head of the iconic toy retailer based in Wayne.
He didn’t have any toy industry experience, but he was a successful CEO who had led the turnaround at once-slumping Domino’s Pizza.
Brandon was confident he could get the Toys R Us brand headed in the right direction, too.
He did it with Domino’s, where a push to online ordering (you may not remember it was the first pizza chain to offer the service) helped turn the company around. As did, believe it or not, a new recipe for its pizza sauce.
Brandon was confident he could complete the same turnaround at Toys R Us, which he said had all of the attributes in place it needed to compete in the new e-commerce world — starting with brand recognition that is as strong as any company in any sector.
“One of the greatest assets the company has is this brand and the emotional connection people have to it,” he said. “There’s an affection for this brand.”
Brandon talked about how Toys R Us was a retailer in a unique position in which new technology would help grow its brand, not bury it.
With more than 850 locations around the country, Brandon said, the company could implement a ship-from-store e-commerce model that could be far more effective (and less costly) than the limited number of distribution centers Amazon and others could build.
And he talked about how the one thing specialty stores have that online giants can never replicate: the in-store experience.
“We can provide a specialty experience,” he said. “All you have to do is take a child into one of our stores and see the joy they get from being in that type of environment.”
Brandon spoke with the enthusiasm and spirit and fight that you would expect from a former college football quarterback at Michigan.
It sounded like a good idea at the time.
Now it appears as if it will not be enough to save the company.
This week, if a growing number of analysts and insiders are correct, could be the last for Toys R Us, which appears headed for Chapter 7 bankruptcy liquidation unless a last-minute buyer emerges. Most feel that is unlikely.
The extent of the fallout in New Jersey remains to be seen.
The disappearance of Toys R Us will result in the loss of thousands of jobs in the state when you consider those at the Wayne headquarters and in the more than a dozen stores still open around New Jersey.
In some respect, some of these jobs are already being transferred to other parts of the New Jersey economy.
And then there are the connective jobs. More e-commerce sales will lead to more jobs in the courier and delivery business for third-party logistics companies.
We can only hope this is the case, for only one thing is certain: This will not be the last big retailer to call it quits this year. By all accounts, Sears appears to be headed in this direction, too.
It is a cautionary tale for retail companies.
Having a niche — and an iconic brand name — is not enough.
It takes a new-age business plan to survive.
With Toys R Us, it appears Brandon never found the secret sauce.