Toy executive plans $675-million bid for Toys R Us despite failed crowdfunding effort
Billionaire toy executive Isaac Larian said Thursday his crowdfunding effort to raise money to buy Toys R Us stores has fallen short.
But Larian said he still plans to submit a bid of $675 million — from his own coffers, other investors and bank financing — to a bankruptcy court on Friday to buy 274 Toys R Us stores and use the brand name. He, along with other investors, also plans to bid $215 million for the Canadian business of 82 stores.
Larian, chief executive of privately held MGA Enterprises, which makes the popular LOL Surprise dolls, said he was disappointed that his pledge of $200 million to buy the bankrupt retail chain with other investors foundered, with only $59,000 raised in three weeks.
He said other toy companies initially were interested in joining the crowdfunding effort but backed out. Larian said they were public companies thinking about the short term.
The liquidation of Toys R Us “is going to have a long-term effect on the toy business,” said Larian, whose company is in Van Nuys. “The toy industry is going to suffer.”
The Toys R Us crowdfunding effort was a long shot to start with, as Larian touted plans to try to save more than half the Toys R Us stores set for liquidation in coming weeks.
Toys R Us’ troubles have already shaken some big toy makers, including Mattel and Hasbro. The planned liquidation would have a bigger effect on smaller toy companies that had relied on the chain more heavily. Nearly 1 in 5 MGA Entertainment sales are rung up at a Toys R Us store.
Bob Wann, CEO of private toy company PlayMonster and chairman of the Toy Industry Assn. trade group, expects a flurry of acquisitions of toy companies but says the industry will be able to regain any lost sales in the next few years.
The liquidation of Toys R Us, which threatens more than 30,000 jobs, would be the end of a company burdened with $5 billion in debt and hurt by shifting currents, including online shopping.
