Key facts
- Toys R Us will exit the Japanese market by the end of the year at the earliest.
- The company has operated in Japan for 35 years.
- A falling birthrate is cited as a challenge for the business in Japan.
Toys R Us will exit the Japanese market by the end of the year at the earliest, Nikkei learned Tuesday, as business in the country becomes increasingly challenging in the face of a falling birthrate. The company has operated in Japan for 35 years.
In the U.S., the once-mighty retailer filed for Chapter 11 bankruptcy in September after years of slipping sales and mounting debt. Experts blame management for failing to innovate its business model, incorporate technology or adapt to changing consumer behavior, contributing to its woes alongside intense price competition from mass retailers like Walmart, Amazon, and Target. A leveraged buyout in 2005 by private investors Bain Capital Partners, Kohlberg Kravis Roberts, and Vornado Realty Trust, while intended to buoy the company, ultimately proved too much due to debt payments. The company had previously announced plans to close 180 of its roughly 800 U.S. stores and all 100 of its United Kingdom stores. Wharton marketing professor Barbara Kahn, Denise Dahlhoff, research director at Wharton’s Jay H. Baker Retailing Center, and Mark Cohen, director of retail studies at Columbia University’s Graduate School of Business, have discussed the company's struggles. Cohen described the chain as "guilty of serial mismanagement" and stated that retailers must "progress, morph, and modify" to adapt to market and customer behavior changes, a feat Toys R Us failed to achieve.