What Really Happened to Toys R Us?
Toys R Us was crushed by LBO debt—interest costs and underinvested e-commerce accelerated its collapse.
“What Really Happened to Toys R Us? The Billions in Debt That Killed Childhood” The Mystery Hook:
Toys R Us was PROFITABLE when they filed for bankruptcy They weren’t losing money—so why did they die?
The Intrigue:
Private equity firms (KKR, Bain Capital, Vornado) bought TRU in 2005 for $6.6 billion Loaded the company with $5.3 billion in DEBT Toys R Us had to pay $400 MILLION annually just in interest Meanwhile, Amazon was eating their lunch AND they couldn’t invest in e-commerce because all profits went to debt
Mystery Elements:
The villain: Private equity vultures who extracted value while killing the company The victim: 33,000 employees laid off with zero severance initially The conspiracy: Did PE firms deliberately bankrupt them to extract real estate value?
Reveal: This wasn’t a business failure—it was financial engineering that killed an iconic brand. “Murdered by private equity.”