In an unusual bid to save some Toys R Us stores from closing, toy maker executive Isaac Larian — along with other investors — has started a crowdfunding campaign. The effort aims to save more than half of the retailer’s 735 stores that could close through bankruptcy proceedings, the AP reported.
The campaign hopes to raise $1 billion in funding. A website, savetoysrus.com, sends consumers to a GoFundMe page. Larian and “affiliated investors” have already pledged $200 million.
Still, the plan has to overcome some challenges, such as getting the approval of a bankruptcy judge and funding from other investors who can dedicate significant amounts of money to the cause. The plan appears to be the first of its kind to save the embattled toy brand.
If the effort were to be successful, Larian would see a large benefit. After all, Larian heads up MGA Entertainment. Nearly 1 in 5 sales of the company’s products are made in a Toys R Us store.
The news comes as Toys R Us will either sell or shutter all of its brick-and-mortar stores in the U.S. after failing to restructure its debt or find a buyer, Reuters reported.
The retailer has over 700 remaining locations in the U.S., including those under the Babies R Us banner. If completed, the company’s liquidation would be among the largest in retail history since Sports Authority closed nearly 500 stores, The Wall Street Journal reported.
Since a leveraged buyout, Toys R Us has been burdened with over $5 billion in debt. Competition from eCommerce retailers such as Amazon and discount stores such as Walmart hasn’t helped the company either.
Beyond the U.S., Toys R Us Chief Executive David Brandon has said the company may liquidate its operations in France, Spain, Poland and Australia. In addition, the company hopes to find a buyer for its Canadian business, which it plans to package with 200 stores in the U.S.
“We’re putting a for sale sign on everything,” Brandon told employees, according to WSJ. “Frankly, all anyone has to do is offer one dollar more.”