LOS ANGELES -- California toy mogul Isaac Larian is leading an effort to save more than half of the 735 domestic Toys R Us Inc. stores that would close under the bankrupt retailer's plan to liquidate.
Larian is majority owner and chief executive of MGA Entertainment Inc., a privately held toy-maker based in Van Nuys whose lineup includes Bratz dolls and Little Tikes products, for which Toys R Us is a major customer.
Larian, with a net worth of $1 billion, according to Forbes, and associated investors personally pledged $200 million. They are trying to raise an additional $800 million with a GoFundMe campaign that they created to acquire the stores, MGA confirmed Thursday.
They also created the hashtag #SaveToysRUs on social media.
Larian cited financial, employment and sentimental reasons for his bid. The long-shot bid would be a huge benefit to Larian, too. Nearly 1 in every 5 sales made by MGA is rung up at a Toys R Us store.
"The toy business will suffer" without Toys R Us, Larian said in a telephone interview. "People say that if there is no Toys R Us another retailer will pick up the slack. I don't think so because they don't have the room."
Major retailers with large toy departments, such as Walmart and Target, carry about 3,000 fewer items on shelves than Toys R Us stores, Jim Silver, editor in chief of toy-review site TTPM.com, previously told The Times.
Larian said about 130,000 U.S. jobs are at risk, not only at Toys R Us but at suppliers, distribution centers, trucking companies and other firms tied to the retailer.
They include MGA's Little Tikes plant in Hudson, Ohio, that employs 1,200, because "40 percent of the products produced by that factory were sold to Toys R Us," Larian said. Overall, Toys R Us accounts for 18 percent to 20 percent of MGA's sales, he said.
"I'm very hopeful" about salvaging hundreds of the stores, Larian said. "I am more than 85 percent to 90 percent sure I can get that funded."
Larian also is leading an investor group that's making a separate attempt to acquire Toys R Us' Canadian operations along with about 200 of the chain's top-performing U.S. stores, MGA confirmed.
Toys R Us declined to comment on Larian's bids.
Larian's effort not only faces the hurdle of finding enough additional investors, it also would have to be cleared by the U.S. Bankruptcy Court overseeing Toys R Us' liquidation. The effort was first reported by The Associated Press, and before that Larian had hinted to Forbes that he might try to acquire some or all of the Toys R Us outlets due to close.
"I sold my first product to Toys R Us in 1979," Larian said. "The best memories of my three children when they were young was to go inside a Toys R Us."
After filing for bankruptcy protection in September, Toys R Us said last week that it planned to liquidate its U.S. business and close its 735 stores in the United States and Puerto Rico, including a Toys R Us in Fort Smith and a Babies R Us in Little Rock. There are three other Toys R Us stores in Arkansas -- in Little Rock, North Little Rock and Fayetteville.
With about $11 billion in annual sales, the chain failed to keep pace with consumers' increasing shift to online shopping, and Toys R Us also was saddled with $5 billion of debt stemming from its buyout in 2005 by a trio of investment firms that took the company private.
Toys R Us had hoped to reorganize under the bankruptcy laws but opted to liquidate after what Toys R Us Chief Executive David Brandon called a "devastating" holiday shopping season last year.
Known for his feisty demeanor, well-tailored suits and being a tough competitor -- MGA was locked in years-long litigation with Mattel -- Larian immigrated to the United States from Iran as a teenager in 1971. His first job: washing dishes at a Lawndale restaurant.
Larian and his brother eventually started an import business that later became MGA, which blossomed in 2001 with the debut of Bratz, a line of sassy dolls with eye shadow and glossy lips that cut deeply into sales of Mattel's iconic Barbie doll.
In another sad development for the iconic toy store, Charles Lazarus, the man who founded it, has died.
Lazarus died March 15 in Manhattan, Michael Goldstein, a close friend who was the company's former chairman, said in a phone interview.
From the first Toys "R" Us outlet, opened in 1957 in the Maryland suburbs near his hometown of Washington, Lazarus stuck to a winning formula of high volume, discounted prices and cookie-cutter predictability.
As much as anyone, he transformed the toy business from Christmas-focused to year-round. Delighted manufacturers ran proposed products by his company before committing to wide-scale production, according to a 1986 article in Atlantic Monthly magazine, which called Lazarus "the person most responsible for loosening Santa's grip on the toy business." His strategy created the world's largest toy-store chain.
Information for this article was contributed by Anne D'Innocenzio of The Associated Press.
Business on 03/23/2018