Isaac, who had launched a failed campaign to keep Toys R Us alive, says he will not sell his toys to the newly resurrected retailer.
As reported by northjersey.com, Isaac Larian, the chief executive of MGA Entertainment, said the lenders that pushed Toys R Us into liquidation will not get the chance to sell his merchandise when they unveil a new company with the Toys R Us names — and mascot.
Isaac reacted to news this week that the distressed asset investment groups, including Solus Asset Capital Management, and Angelo Gordon & Co., plan to retain the Toys R Us brand names and intellectual properties and use them to create new stores in the United States.
The lenders’ first move has been to create a wholesale business, Geoffrey’s Toy Box. That company has exhibiting at the Dallas toy show this week.
Isaac said the news is another sign that the lenders and other financial firms never intended to save the company, but planned all along to dismantle it and keep the best parts for themselves, for their gain.
He commented: “I am so angry. This is unbelievable – 33,000 people lost their jobs, more than that. They destroyed a brand that’s been around for 70 years for their short-term … gains.”
Back in March, Isaac received national attention when he offered to buy the American and Canadian businesses of Toys R Us, and said he would raise money from investors and a crowd-funding campaign on the internet. Isaac pledged that he would keep hundreds of stores open and would make them more fun and experiential. He ultimately bid $891m, but Toys R Us lenders and bankruptcy advisers rejected the offer as too low.
Isaac said the company’s advisers told him the intellectual property rights alone were worth $300m to $400m. By retaining those rights, the lenders “are basically giving themselves a $300m to $400m gift,” he said.
Now, “MGA for one will never give them credit or do business, because they’re not reliable people,” Isaac said.
He said he won’t sell his toys to them even if they pay cash in advance. “For me it’s a matter of principle,” he said.
Toy industry expert Jim Silver said he expects most manufacturers will be wary about selling to Geoffrey’s Toy Box, or any new version of Toys R Us, and that they will sell only if they are confident they will be paid.
At the annual Dallas Fall Preview show this week, the Toys R Us mascot Geoffrey walked the aisles and posed for photos with manufacturers to advertise Geoffrey’s Toy Box and spread the word that Toys R Us is returning in a new form.
Michael Rinzler, founding partner and co-president of Pennsylvania-based Wicked Cool Toys, said he’s cautiously optimistic that the latest news from Toys R Us could lead to more toy stores. “We’re definitely interested in seeing what it’s all about,” said Michael, who is attending the Dallas show. “I think we have the potential to sell to them.”
News about Geoffrey’s Toy Box has generally being received in a positive way among toy manufacturers at the Dallas event, Michael said. “Consumers definitely miss and have a love for Toys R Us and the industry needs it.”
Isaac, however, doesn’t think the lenders backing the new venture will be in the toy business for the long haul. “What they plan to do is another short term thing to put more money in their pocket,” he said.