Toy Mogul Isaac Larian Waves White Flag on Salvaging Toys R Us

Last Updated on December 26, 2019 by Danielle

Toys R Us

MGA Entertainment CEO Isaac Larian has given up on Toys R Us after a long battle to salvage the beleaguered specialty toy chain.

Billionaire executive Isaac Larian has officially waved the white flag on Toys R Us – saying he will no longer pursue trying to save Toys R Us after a long, hard-fought battle to salvage the beleaguered specialty toy megastore.

Larian told CNN Money in a statement: “I am most disheartened that the legacy of the retailer will be lost for future generations.” Reportedly, he was unable to reach a deal with the company’s lenders.

In April, Larian announced a $675 million bid for 274 U.S. Toys R Us stores and $215 million for 82 Canadian stores. That bid was ultimately rejected by Toys R Us for being too low.

Shortly after having his bid rejected, Larian dropped his bid for the Canadian arm and focused his efforts solely on acquiring the U.S. assets. He was adamant about reaching a deal for U.S. stores to salvage Toys R Us for future generations, save hundreds of thousands of jobs, and protect the toy industry. He also had plans to transform Toys R Us into a Disneyland of toy stores where kids could play with and test out all the newest toys.

Larian and his fellow investors were only 10 percent under the winning bid for Toys R Us Canada, giving him a sense of hope for his U.S. bid. He said, “We have the financing we need. It’s now a matter of determining how much more we’re able to bid.” Ultimately, Larian lost the bid for Canadian stores to billionaire Prem Watsa and out of respect he did not further pursue that deal.

At the time Larian said, “I’m an optimist. I think things are going to work out. The people handling the sale, I think they’re genuinely trying to save the stores here in the U.S.”

Toys R Us filed for bankruptcy in September with hopes of shedding its debt and reinvesting in its stores. However, all didn’t go as planned so Toys R Us announced in March it would sell or close its entire U.S. operation – sending shockwaves in the toy world.

Larian’s decision comes in the wake of his failed efforts to merge his company MGA Entertainment with embattled toy giant Mattel.

Recently, Larian had attempted an unsolicited merger bid for Mattel for an undisclosed amount. Mattel has toppled from its top position in the industry and has been struggling with profitability in recent years. Its CEO Margo Georgiadis suddenly stepped down after only 14-months in the role and was replaced by Ynon Kreiz. Not surprisingly, Mattel’s stock has taken a beating – plummeting nearly in half over the last few years. The company was dealt a severe blow by Toys R Us’s bankruptcy but hopes to recover in the long term.

Larian was hoping to take over control of the combined company, as he’s a genius when it comes to toys and knows the desires of people who play with them. He stated that although Kreitz is a good guy, he will fail just like his predecessor because Kreitz doesn’t know toys like he does.

Departing former Mattel CEO Christopher Sinclair wrote in a letter in response to Larian’s bid: “The Mattel board unanimously concluded that this proposal is not in the best interests of Mattel and its shareholders. Mattel is not interested in further discussing the matter with you.”

So, in other words, Mattel kindly shattered any hope of a merger between Mattel and MGA Entertainment. It’s also worth noting that Larian has been waging a decade-long legal battle with Mattel over the copyright of Bratz dolls. Although it was a valiant effort to salvage Toys R Us, it’s not the fairy tale ending most were hoping for … and that’s a crying shame for American childhood and countless lost U.S. jobs.

So what do our readers think about the demise of Toys R Us? Sound off in the comments below. We’d love to hear from you!

Source: CNN Money

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