If you haven’t heard already, Toys ‘R’ Us will be closing down or selling off more than 700 stores in the US leaving 30,000 employees without employment due to bankruptcy
However, Malaysian and Australian stores are safe from this decision for now.
That’s not all. In their recent annual filing, the toy company cited that the main cause for their losses could be due to the declining birth rate today, according to Business Insider.
“Most of our end-customers are newborns and children and, as a result, our revenues are dependent on the birth rates in countries where we operate,” the filing reads.
“In recent years, many countries’ birth rates have dropped or stagnated as their population ages, and education and income levels increase. A continued and significant decline in the number of newborns and children in these countries could have a material adverse effect on our operating results.”
Birth rates have reached a record low with 62 births per 1,000 women for those under the age of 30, compared to the increase of those over 30 in the US.
Malaysia also sees a 2.5% decrease of live births between 2015 and 2016 – the lowest rate recorded since the formation of Malaysia in 1963.
The report also cited that the company’s losses could be caused by the increase of online shopping, cheaper alternative stores and also the increase in labor costs
To top it off, apps and games on tablets and smartphones started replacing traditional toys, according to research firm GlobalData Retail.
Toys 'R' Us will turn 61 years old this year. It first started as a baby furniture shop back in 1948, opened by founder Charles Lazarus, who added toys and baby products after running the business for two years.
The request for toys increased and he opened up his first store dedicated solely for toys in 1957, calling it "Toys 'R' Us" with the letter R written backwards to reflect childlike scrawl.
Ironically, just a few months prior to their decision to close, CEO David Brandon mapped out ways to upgrade online sales, renovate stores, and increase shopping experience.
Unfortunately, the company failed to bounce back from competition setbacks and overwhelming debt
There are currently 39 Toys 'R' Us stores in Malaysia.