They Need $1B to Save Toys R Us, Have $200M Already

Toy company executive Isaac Larian says he and other unnamed investors have pledged a total of $200 million in financing and hope to raise four more times that amount in crowdfunding in order to bid for up to 400 of the Toys R Us stores being liquidated in bankruptcy. The unsolicited bid still faces many hurdles, including finding other deep-pocked investors and getting a bankruptcy judge to agree to it. But this is the first public plan to keep the cherished toy brand in existence in the United States. Such a long-shot move would also greatly benefit Larian's primary business. He's CEO of Bratz doll-maker MGA Entertainment, which relies on Toys R Us for nearly 1 in every 5 sales and is the world's largest privately held toy company. Larian, who is a billionaire, is using his own money, not MGA funds, for the bid.

He and the other investors are interested in more than half the 735 US stores Toys R Us plans to liquidate, and are hoping to secure pledges toward their $1 billion goal. Larian, who estimates that 130,000 US jobs could be lost when you include layoffs at suppliers and logistic operations, said a total Toys R Us liquidation could mean MGA would have to lay off workers at an Ohio plant that makes the Little Tikes toy vehicles. That brand accounts for 25% of MGA total sales, and Larian says only Toys R Us really has enough room to display the cars. Larian claims that if 400 US Toys R Us stores are salvaged, he could save one-third of the 130,000 jobs. Why might he be successful with a retail chain struggling to stay relevant in the age of Amazon? For one thing, Larian wouldn't have the massive $5 billion in debt that hampered the current owner of Toys R Us, notes the AP.