TOYSRUS.docx - TOYS R US Leverage Buyout Plan Business...

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TOYS R’ US Leverage Buyout Plan Business owners are told that debt is not necessarily a bad thing, it is simply a measure of risk that the firm is willing to take in order to gain assets to increase their cash flow in hopes of paying back the incurred debt. This, however, was not the case for what was once the greatest store for kids and the closest they got to Heaven on Earth. This place was called Toys R Us and they will be closing their stores in 2018. Toys R Us began in 1948 as a children furniture store by Charles Lazarus. In June of 1957, Lazarus switched his strategy and decided to make his store a children store filled with toys. This decision led to Toys R Us becoming a retail giant and one of the best-selling stores in the United States throughout the 1960’s all the way to the late 90’s. However, since the rise of cheaper retail competitors such as Walmart and Target, the toy firm faced issues in selling their toys and paying back suppliers. This led to Toys R Us company to be bought out by groups of investors in a leverage buyout plan. In 2005, Toys R Us agreed to sell the entire company for
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