So why did Toys R Us fail….they didn’t get great business advice!

I was stunned when I heard on the news today that Toys R Us have gone into administration as well as Maplin’s.  It seems like it is one big name after another that is struggling and going under.   Monarch airlines, BHS, in recent times and a few years ago Woolworths and Blockbusters.

I remember the jingle that Toys R Us had…” It’s a magical place.  We’re on our way there”. I for one, used to shop there a lot when I was expecting Tenesha and when she was very young for toys.  However, it wasn’t the only place I went to Boots, John Lewis were also up there and that seems to have been the problem for Toys R Us.  It seems they lost there way and didn’t really know who their target customer was or what they wanted.

When the company first started out back in the 1950’s in the USA, out-of-town shopping was all the rage and even until the late 90’s when families apparently liked nothing better than finding an out of town retail park, got all there shopping done, parked easily for free and could grab a bite to eat.

These days though shopping has changed, we buy more online and we can buy toys almost anywhere even at your local supermarket and perhaps more importantly we are changing our habits.  Children today are much happier with more high-tech toys, perhaps having fewer but obviously costing more per item and potentially lasting longer than a plastic doll or toy car!  So, if I had to sum up why Toys R Us has failed I’d say…

  • Consumer behaviour has changed we shop in different places and way these days
  • Changing consumer demand – a switch from imagination type toys to solitary games and children like adults seeking more experiences rather than possessions
  • More competition/choice and more entrants to the market which results in price pressure
  • Not being able to differentiate yourself and stand out from your competition
  • Not knowing who your customer is– not knowing your Niche resulting in being too vanilla
  • Not making your customer feel valued and cared for

I was equally stunned to read that Maplin’s had been around for 45 years.  So, what went wrong, well according to the press, Maplin’s were in talks with buyers which failed to secure a sale.  Apparently, the business faced a slump in the pound after the Brexit vote, weak consumer confidence and a withdrawal of credit insurance.  It is apparent that there has been a slowdown in consumer spending and more expensive imports as the pound has weakened, clearly a lot of their stock comes in from abroad!

Maplin’s has 2,335 staff and 217 stores across the UK with an annual turnover of £235.8m and ironically had begun its life as an online retailer to the hobbyist.  It does seem that the high street is shrinking exponentially and will continue to do so unless it regroups and works out it’s identity.

So, in answer why have these businesses failed, well they lost sight of who they were and what they were here to do.  Remember there is no Status Quo in business you are either growing or shrinking…nothing stays the same.

When was the last time you reflected on…?

  • Who is your target market?
  • What do the target market want?
  • What do the target market value?
  • How do you best serve your target market?

One final thought….well let’s be honest you would expect me to mention the numbers wouldn’t you being accountants and business advisers…make sure you know your numbers…they don’t lie and if you are on top of them you can spot the trend, and sort out your business before the rot sets in so you won’t end up another statistic like Toys R Us or Maplin’s.

 

To read the full article from the BBC on Toys R Us click here…

 

This article is for general information only and no action should be taken, or refrained from, as a result of this information.  Professional advice should be taken based on specific circumstances in each individual case.  Whilst we endeavour to ensure that the information contained in the article is correct, no liability  will be accepted by KMA Accountancy which is a trading name of Kim Marlor Associates Ltd or damages of any kind arising from the contents of this communication, or for any action or decision taken as a result of using any such information.

 

Get in touch

0161 410 0020
info@kmaaccountancy.co.uk

KMA Accountancy
Progress House
17 Cecil Road
Hale
Altrincham
Cheshire WA15 9NZ

Latest news

KMA newsletter full of profit and business improvement and growth strategies – Spring 2018

In this edition of the KMA Accountancy profit and business growth newsletter we take you on holiday with an article on Thomas Cook and how could you do what they...

KMA Accountancy of Hale, Altrincham – proud to be part of Handpicked Accountants as one of the UK’s leading firms!

KMA Accountancy of Hale, Altrincham are proud to announce that we have been recognised as one of the UK's leading firms. read on here....
...

Tweets @KMAltd