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Founder of Toys ‘R’ Us dies at 94

By LAURENCE ARNOLd
Bloomberg

March 22. 2018 9:33PM
Toys “R” Us founder Charles Lazarus, who has died at 94, is shown second from right at the 2001 grand opening of the new Toys “R” Us store in New York’s Times Square. (JOE TABACC/BLOOMBERG NEWS)



Charles Lazarus, who combined supermarket-style service with touches of whimsy in creating Toys “R” Us, a longtime retail success that fought high debt and fierce competition and finally succumbed just last week, has died. He was 94.

He died Thursday in Manhattan, Michael Goldstein, a close friend who was the company’s former chairman, said in a phone interview. Amy von Walter, a spokesman for Toys “R” Us, said the news adds to the chain’s “many sad moments” recently, but she added that the company “will forever be grateful for his positive energy, passion for the customer and love for children everywhere.”

Unable to fend off rivals while saddled with more than $5 billion in debt, the company filed for bankruptcy in September 2017 and in recent days began closing down its U.S. and U.K. operations while attempting to reorganize and sell its remaining international units. The chain includes more than 1,600 Toys “R” Us and Babies “R” Us stores in 38 countries.

From the first Toys “R” Us outlet, opened in 1957 in the Maryland suburbs near his hometown of Washington, Lazarus stuck to a winning formula of high volume, discounted prices and cookie-cutter predictability.

As much as anyone, he transformed the toy business from Christmas-focused to year-round. Delighted manufacturers ran proposed products by his company before committing to wide-scale production, according to a 1986 article in Atlantic Monthly magazine, which called Lazarus “the person most responsible for loosening Santa’s grip on the toy business.” His strategy created the world’s largest toy-store chain.

Lazarus led the New Jersey-based company — now based in Wayne — through its 1966 sale to Interstate Department Stores Inc. and through Interstate’s bankruptcy in 1974, which resulted in Toys “R” Us emerging as the surviving company and going public in 1978.

Since Lazarus stepped down as chief executive officer in 1994 and chairman four years later, the company has faced new competition from online retailers such as Amazon.com Inc. and from the rise of Wal-Mart Stores Inc., which overtook it in U.S. toy sales in 1998.

Bain Capital LLC, KKR & Co. and Vornado Realty Trust took over Toys “R” Us in a $7.5 billion leveraged buyout in 2005. In 2009, the toymaker acquired FAO Schwarz and its flagship Fifth Avenue store in Manhattan. That store closed in 2015, a victim of rising rent.

As his chain expanded, Lazarus emphasized dependability over novelty. The 18,000-plus toys for sale at any given time were the same in each store. Decisions on which items to stock, and how to display them, were made at corporate headquarters.

“There’s an enormous opportunity in America if you’re willing to make a commitment to inventory,” Lazarus said.


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