In the area of manpower, they were unable to retain people. (Fortune 2017) Fishbone AnalysisĪ review of Toys “R” Us’s organizational weaknesses revealed opportunities in several areas including manpower, management, measurement, methods, and materials. The missteps by management in reading the digital marketplace, continuing to hold onto a large retail footprint of brick and mortar stores, and not managing its debts eventually led to its steep downfall by 2017. However, it continued to have compounding losses despite having revenues to earn a spot in the Fortune 500. While competitors like started to grow in the digital marketplace and newer retailers like Target and Wal-Mart opened thousands of retail locations with toy sections in its brick and mortar stores, Toys “R” Us continued to focus and expand its presence to over 1,110 stores globally, and became part of the Fortune 500 club in overall revenues. Nearly $5.3 billion of the $6.6 billion purchase price was paid using debt and had to be repaid by the newly privatized company. became a private company and exited the stock market thanks to a leveraged buyout by a consortium of companies: KKR Group, Bain Capital and Vornado Realty Trust. By 2000, it signed a partnership deal with to direct all its online customers to buy from the digital retailer as the company focused on its brick and mortar stores. By 1984, it expanded internationally, launching stores in Canada and Singapore. His strategy of focusing on baby furniture and then toys became so successful, the company became a market leader and became a darling in Wall Street by 1978. In less than a decade, Lazarus reinvented his retail chain to Toys “R” Us, Inc. IntroductionĪfter World War II, Charles Lazarus started a store in Washington, D.C. Why did this popular Fortune 500 company fail? A leveraged buy-out, increasing debt levels, and leadership's failure to invest in digital transformation led to the downfall of this once iconic retailer. Today, we're learning something else that's not related to the covid-19 pandemic. By Don Sausa, Michelle Tessman, and Ronald Tennant

Charles lazarus