Isaac Larian, CEO of MGA Entertainment, confirmed he has given up his effort to buy several hundred Toys R Us stores from the bankrupt retailer after an agreement failed to be reached.
A group of investors led by Isaac had submitted a $675 million bid for 274 of the 735 U.S. and Puerto Rican stores the retailer is liquidating.
The bid was rejected, prompting a planned increase to the bid after a separate offer made for 82 Canadian Toys R Us stores was topped by a Toronto investment firm. However, negotiations since then have failed.
“The so-called advisors and lawyers milked that company to death in a matter of seven months, which is remarkable,” Isaac said. “And the current lenders are just not in touch with reality on valuation.” Toys R Us declined to comment on the decision.
The announcement came two months to the day after the launch of the #SaveToysRUs campaign, which included a $1b GoFundMe campaign, which fell short of its target, raising less than $100,000.
Isaac said his inability to reach a deal with debt holders had led him to consider opening his own toy retail chain. “We had a great, great plan in how to turn around Toys R Us stores, and I don’t want that to go to waste,” he said, but acknowledged that such a chain wouldn’t be as large as the Toys R Us stores he sought.
Toy industry consultant Richard Gottlieb suggested that this was not the end of the road for Isaac’s plans. “I think the big question is why someone would need to purchase Toys R Us to get in the game. There will be hundreds of vacant stores and thousands of talented people ready to be recruited and put to work under a new retail brand name that is not tarnished,” he commented.
“Toys R Us has burned its bridges with suppliers, it has turned off consumers with its going-out-of-business sales, its failure to honour its gift cards and the dismissal of 30,000 employees without a severance package,” Richard added.
Isaac concluded: “I gave it my best to make it happen. I didn’t give up until the last minute. I fought the system and what’s going down because it is going to hurt the whole toy industry.”
