Toys ‘R’ Us Files for Bankruptcy

Toys R Us Files for Bankruptcy

A mere two weeks after filing for bankruptcy, Toys ‘R’ Us debuted an augmented reality experience in hopes of helping to revive its stores and save its legacy.

What is This New Augmented Reality?

The augmented reality experience places computer-generated images on top of the actual world — or one’s surrounding environment — in a similar fashion to the Pokemon Go game from last year. The new experience will be available at Toys ‘R’ Us stores nationwide on October 21st. But will this solve the company’s financial woes?

Why Did They File for Bankruptcy?

Toys ‘R’ Us Inc. is the largest U.S. toy chain store. Even so, it filed for Chapter 11 bankruptcy after not being able to keep up with online trends and deep discount chains. This particular Chapter 11 filing is among the biggest ever by a specialty retailer. Toys ‘R’ Us has around 1,600 stores and 64,000 employees.

Chief Executive, Dave Brandon, said, “Together with our investors, our objective is to work with our debtholders and other creditors to restructure the $5 billion of long-term debt on our balance sheet.”

Dozens of well-known retail chains have filed for bankruptcy this year alone; some of these chains include Perfumania Inc., rue21 Inc., Gymboree Corp., Payless Holdings LLC and BCBG. In addition to that, major retailers such as Macy’s and Sears have closed hundreds of stores, struggling to compete with stores such as Wal-Mart and Amazon’s recent acquisition of Whole Foods implies to many that Amazon will use its discount pricing power and vast customer reach to transform the brick and mortar grocery experience.

Will the AR Experience Help?

Back to the new AR experience at Toys ‘R’ Us: the program has been in development long before the company filed for Chapter 11 protection. The program takes place in Toys ‘R’ Us stores and includes an app which will be the key to unlock the AR activities scattered throughout each Toys ‘R’ Us store. Geoffrey the giraffe (the beloved Toys ‘R’ Us mascot) will welcome customers virtually and provide them with instructions on what to do. Participants will be guided by flashing icons and stickers on the floor and must use their smartphone or tablet to “scan in” before beginning the experience.

Some examples of what the experience entails: In the doll aisle of the store, a virtual version of a baby doll will come to life on the shelf, with the option of being adopted, named — you can even change its dirty diaper. In the sports section of the store, participants can drop a virtual ball into a hoop on their screen while comparing their score to others on a virtual scoreboard.

Will This be Enough?

Toys ‘R’ Us also reinvented its website, in hopes of offering a more contemporary online experience to today’s buyers. Analysts agree that if the retailer wishes to carve a space for itself in the current market’s competitive atmosphere, it must create unique experiences that appeal to a young, tech-savvy generation. Later this fall, the retailer also plans to open playrooms at 42 stores where children can try out games; employees or “toy demonstrators” will be near, on standby, to help with the experience.

Toys ‘R’ Us plans to keep all of its stores well-stocked for the holidays, despite its current Chapter 11 status. Dave Brandon said, “A lot of people hear the word bankruptcy, and they immediately conclude that the brand or the company is going to go away.” This will not be the case with Toys ‘R’ Us, we certainly hope.

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