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How Private Equity Killed Toys “R” Us

Charles Lazarus started a children’s bargain store in Washington D.C. in 1948. Specialising in furniture, the shop offered very few toys for sale. Lazarus soon realised that toys went out of fashion and broke more often than any other product made for children. This meant one thing for the business: higher sales. In 1957, Lazarus ditched the furniture and pivoted to selling toys. The first Toys “R” Us store was branded as a supermarket for toys, with items stocked on high shelves and a wide variety of choices. His timing could not have been better. After the Second World War, America’s growing middle class were starting families and looking for ways to spend their money. Toys “R” Us was doing great business — it opened hundreds of stores across the country, acquired a global presence, and started an apparel brand. The company was famously known for its knack o ...

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