Toys R Us been spiraling toward bankruptcy for years as it failed to keep up with competitors. Analysts cited many reasons for the company's demise: Lousy in-store customer service, a second-rate website and prices that are often higher than at many of its big-box competitors. Add to that piles of mounting debt -- much of it dating to a 2005 leveraged buyout -- and it was clear, many said, that the 60-year-old brand was in trouble.

"When you're cursed with all this debt, there's no way you can compete anymore," said Howard Davidowitz, a retail consultant who worked with Toys R Us in the 1980s and 1990s. "Now they're running up and down the halls trying to pick up the pieces, but there's no way around it: This is a very bad situation, and it will weaken the company forever."


The Wayne, N.J.-based company was for decades the country's preeminent toy retailer, with a towering flagship in New York's Times Square and a ubiquitous icon, Geoffrey the Giraffe. In 2009, it purchased competitor FAO Schwarz but eventually closed its New York store on Fifth Avenue, citing high costs.

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