By David Lee | Nov 1, 2018
In recent news, Toys R Us and Sears went or are going bankrupt. What happened and can we learn from their mistakes?
Toys R Us
- Amazon wasn’t the problem. They walked into the lion’s mouth.
- Kept borrowing and interests were way too high. Living on borrowed money.
- Ran out of Cash.
- Online stores and big-box rivals, including Walmart (WMT) and Home Depot (HD), beat Sears on price and convenience
- Tried to compete by closing stores and cutting costs. It slashed spending on advertising and it failed to invest in the upkeep and modernization of its outlets.
- Sales declined. Losses piled up in the billions of dollars.
- The Sears catalog was the way many Americans first started to buy mass-produced goods. That was an enormous shift for people who lived on farms and in small towns and made many of the goods they needed on their own, including clothes and furniture.