Toys ‘R’ Us hires firm to help it explore options
Toys "R" Us' debt may have finally caught up with it.
With $400 million in debt coming due in 2018, Toys "R" Us is bringing in advisors to help the retailer weigh its options, which could include filing for bankruptcy protection. The nation's largest specialty toy retailer has hired Kirkland & Ellis, a law firm that specializes in corporate restructurings.
"As we previously discussed on our company's first quarter earnings call, Toys "R" Us is evaluating a range of alternatives to address our 2018 debt maturities, which may include the possibility of obtaining additional financing," Toys "R" Us spokeswoman Amy von Walter said in a statement
Toys "R" Us has been burdened with a heavy debt load since 2005, when it was purchased by private equity investors KKR, Bain Capital, and Vornado Realty Trust in a $7.5 billion buyout. The chain previously announced it is working with Lazard to help address its debt load, and it successfully refinanced some of its debt last year.
"While the decision of Toys R Us to appoint restructuring advisors is not necessarily a sign that bankruptcy is imminent, it is an indication that the company is in a very uncomfortable financial position," commented Neil Saunders, managing director of GlobalData Retail. "For a robust retailer, debt payments can be challenging. For a retailer struggling to generate sales growth while, at the same time, trying to invest to remain relevant — it can be the difference between success and failure."
Saunders noted that Toys "R" Us is challenged on many fronts, including that it suffers competition from online and physical "generalists" who discount toys to drive customer traffic, and that its large stores are "increasingly unsuited to what consumers want and expect."
"Against this backdrop, Toys “R” Us has to contend with the debt it accumulated as part of the leveraged buyout," Saunders said. "In our view, this is an example of private equity damaging retailers by not running them as commercial trading entities but as ATMs."
in June, Toys "R" Us posted a net loss of $164 million for its first quarter, up from a loss of $126 million a year earlier. Same-store sales fell 4.1%.
Toys "R" Us will report its second quarter earnings on Sept. 26.
Walmart hits major milestone—in Amazon’s backyard
As the online delivery wars heat up, Walmart is expanding its grocery pickup service to the hometown of one of its biggest rivals.
Walmart will open its 1,000th online grocery pickup location on Sept. 6, with the addition of five stores in Seattle. The free service, initially piloted in 2013 in Denver, enables customers to order groceries online and pick them up at their local Walmart store without leaving their cars. To pick up an order, customers park in a specified parking space, and enter a designated number to alert an associate, who retrieves the prepared order and loads it into the customer’s car.
“Our daily mission is to help our customers keep a little more money in their pockets and add more time in their schedules," said Mike Turner, VP of e-commerce operations for Walmart U.S." Online Grocery is doing that for the millions of customers who have tried the service, so we won’t stop with store 1,000.”
In celebration of its 1,000th milestone, Walmart will give away Google Home connected devices to the first 250 customers who use the service in Seattle. The discounter recently teamed up with Google to offer hundreds of thousands of items available for voice shopping via Google Assistant, the online shopping platform that lives on Google Home http://www.chainstoreage.com/article/walmart-deal-google-offer-voice-activated-shopping
In addition to pickup locations, Walmart is also piloting online grocery delivery in six markets.
Among shoppers that use the online pickup service, 89% use it to save time, while 83% enjoy shopping in the comfort of their own home. Final-ly, 79% said they favor the service because they can shop any time, ac-cording to Walmart.
Office supplies giant improves visibility across its supply chain
Office Depot is positioning itself to remove friction throughout its customers’ shopping experiences.
The office supplies giant is partnering with Elementum, which provides a real-time supply chain platform that unifies procurement, logistics, manufacturing and inventory operations. By leveraging the company’s cloud-based Product Graph solution, Office Depot will gain global visibility across every segment of its business operations.
The platform enables Office Depot teams to interact proactively across functions as issues arise. It also keeps users abreast of production functions, shipping and inventory based on data aggregated from all integrated Elementum apps.
Armed with these details, Office Depot can shrink lead times and ensure material availability; as well as proactively adjust to issues in real time to deliver on-time and prevent stockouts. In addition, the technology will accelerate decision-making among cross-functional teams.
“Utilizing Elementum is a game-changer for our operations and performance,” said Gerry Smith, CEO of Office Depot. “With this sophisticated technology, we will transform our company, as we fully leverage this tremendous asset to better serve our existing customers and seek new opportunities.”
The solution will support merchandise moving through approximately 1,400 retail stores and Office Depot’s e-commerce operation.