Case Study Of Toys R Us Canada

1180 Words 5 Pages
Charles P. Lazarus founded the Children’s Supermarket which developed into Toys R Us in 1948. The company was very successful for many years until competitors started to advance, diminishing the company’s revenue. As the company matured the business began making wrong decisions placing the company in further debt.

Toys R Us has recently filed for bankruptcy protection to regain the company's momentum after years of large outstanding debt. The most important issue that led Toys R Us Canada to this state was poor assumptions and poor financial planning. Toys R Us went private in 2005 with one billion dollars in debt. Two private equity companies bought the business with only 1.3billion dollars of their own equity and raised 5.3billion in
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One areas being the high demand for baby products. This market increase was was not predicted which resulted in poor financial planning. Forbes states that company's revenue was 75% sourced from baby products, yet there was shortage for Babies R Us storefronts and inventory in Canada. This revenue was invested in the progression of Toys R Us opposed to extended research of Babies R Us. This led to a decrease in revenue and a negative guest experience. According to Statistics Canada, the birth rates have gone up by 8000 in a span of five years which indicates more sales in baby products. A recommendation is for Toys R Us to spend capital on marketing and inventory based off sale increases monthly. This will help SKU issues such as overstock and will create reflective spending. Another financial issue is the currency exchange Toys R Us Canada faced with the American suppliers. Toys R Us should invest time into looking at inventory sales to and choose wisely when it comes to products. This will ensure that no extra products are being bought therefore currency exchange will reduce. Correspondingly, the company had a difficult time keeping up with competition. A recommendation is for Toys R Us to partner with Amazon. This will decrease competition and create new relationships with digital guests. The CFO of Toys R Us needs to partner with the Marketing and Sales team to …show more content…
This increase will force Toys R Us to further their online strategies to increase revenue. Online shopping is becoming a main channel for busy parents and family members and media based IMC is becoming important for companies. Toys R Us’ main online competitor is Amazon due to their exceptional shipping to Canada with a small fee or no fee at all. Amazon also has a simple and efficient website which is very user friendly. The Canadian Toys R Us online store is seen as a higher priced retailer to the target market, which is sending the digital customer to do research on different websites. Toys R Us needs to advertise through digital media such as Instagram and Facebook to showcase incentives to shop at Toys R Us online. Some recommendations for the company is to use capital to create a cheaper shipping option or no fee at all. Free shipping is a great way to get the digital customer to buy. Another recommendation is to advertise the Toys R Us app. This can be done with a 10-20% discount on the guests next purchase after downloading the app. This will increase online sales. To continue, Toys R Us has a current price match feature online but the feature is difficult for the digital customer to access and utilise. A long-term goal will be to create a simple search engine that the digital guest can use and get results fast. Toys R Us will advertise

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