Toys R Us: How Amazon and a Debt-Fueled Buyout Killed a Toy Giant

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In the summer of 2024, Toys R Us released a promo made with OpenAI's Sora that showed founder Charles Lazarus as a boy dreaming up a toy empire beside a cartoon giraffe. Viewers found it creepy, and the synthetic memory suits a brand that now lives on as licensed intellectual property. This episode tells the full story, starting in April 1948, when Lazarus opened a baby furniture store called Children's Supermart in Washington, D.C. In 1957 he saw that parents buy a crib once but buy toys for years, and he opened the first Toys R Us in Rockville, Maryland.

The chain became the center of childhood retail, from Star Wars figures to Cabbage Patch Kids to Nintendo. Then came two fatal decisions: a ten year exclusive deal that handed online sales to Amazon, and a 2005 private equity buyout, financed with borrowed money, that loaded the company with $5 billion in debt. By June 2018 every remaining American store was closed and 64,000 employees were out of work.

• The backward R in the logo was a deliberate choice to mimic a child's handwriting, and mascot Geoffrey began in the 1950s as a print character named Dr. G. Raffe.
• The $35 million Times Square flagship opened in 2001 with an indoor Ferris wheel, an animatronic T. rex, and a life-size Barbie dream house.
• After failing to deliver online orders for Christmas 1999, the company outsourced e-commerce to Amazon, later sued for breach of contract, and won $51 million in 2009.
• Bain Capital, KKR, and Vornado bought the chain for $6.6 billion, leaving it to pay $400 million a year in interest while stores went without upkeep.
• WHP Global acquired the brand in 2021 and has placed it inside Macy's stores, at American Dream and the Mall of America, and in new markets across Latin America.