California toy mogul
Isaac Larian submitted a $675-million bid Friday to buy 274
Toys R Us stores in the United States — and another $215 million to acquire 82 stores in Canada.
The bid came a little more than three weeks after Larian launched a $1-billion
GoFundMe campaign to save hundreds of the 735 stores the bankrupt retailer operates in the U.S. and Puerto Rico.
But money for Friday's bid will come from Larian's own coffers, additional investors and bank financing, according to a press release by MGA Entertainment Inc., the toy maker owned by Larian.
By Friday afternoon, the crowdfunding campaign that began March 21 had raised only about $59,500 from more than 1,970 people — on top of the $100 million that Larian personally pledged and another $100 million from other undisclosed large investors. A spokeswoman for Larian said he does not plan to use any of the funds raised through small donors on GoFundMe.
Larian's offer for the stores will have to be evaluated by the court that is administrating an auction of the company's assets and considering buyout bids. Toys R Us is already conducting liquidation sales nationwide.
"The time is now. Every day that goes by, the value of Toys R Us declines and more people lose their jobs," Larian said in a statement. "I did my part and now it's up to the other side to accept this offer. If they do, the real work will begin."
Larian's privately held MGA Entertainment in Van Nuys features a lineup that includes the popular Bratz dolls, Little Tikes cars and other toys. The retailer is an important sales channel for MGA, as well as other toy makers.
Larian has estimated that about 130,000 U.S. jobs are at risk, not only at Toys R Us but at suppliers, distribution centers, trucking companies and other firms tied to the retailer. They include MGA's Little Tikes plant in Hudson, Ohio, which employs 1,200 and sells 40% of its products through the retailer.
Toys R Us filed for Chapter 11 protection in September after suffering falling sales for years as Amazon and other online competitors ate into its business.
In late March, Larian announced the #SaveToysRUs crowdfunding campaign following the chain's decision to liquidate its stores in the U.S., including Puerto Rico, after it could not agree with its creditors on a restructuring plan.
Larian is not the only bidder for Toys R Us stores. An attorney for the retailer said in bankruptcy court this week that it has received multiple bids topping $1 billion for its Asia stores. Larian previously told The Times he is not interested in helping bail out stores outside North America and instead wants to focus his energy on the U.S. and Canada.
Larian has admitted that the GoFundMe page was a publicity stunt, but he was hopeful it could draw other large investors to step forward and help him transform the retailer. He told the Associated Press that he was disappointed other toy companies had backed out of supporting him after initially showing interest, saying they were public companies not thinking long term.
"The liquidation of Toys R Us is going to have a long-term effect on the toy business," Larian said. "The industry will truly suffer. The prospect of bringing the Toys R Us experience to a new generation, my new grandson's generation, is enough to motivate me to save Toys R Us."
Larian has not been specific about his plans, but over the last several weeks he has said he wants Toy R Us to be as interactive and as kid-friendly as a theme park — a place where children can play and try out new toys.
Larian also has acknowledged having a soft spot for Toys R Us, noting that the company's late founder, Charles Lazarus, gave him his first break upon entering the toy business more than 30 years ago.
Larian has brushed aside doubts over his bid for the retailer.
He previously told The Times that over his decades-long career, he has repeatedly faced skepticism from toy industry leaders, including after his introduction of Bratz dolls, which he brought to market in 2001. The hip dolls featuring eye shadow and glossy lips ended up being a smash hit and eating away at sales of Barbie dolls, made by El Segundo rival Mattel Inc.
"I like challenges," Larian said. "I have some big, out-of-the-box ideas to save Toys R Us and grow the business if I'm successful in getting Toys R Us assets."