It been reported the Toys R Us are shutting down all their stores, even though and investor as trying to buy up the stores. The short answer what went wrong is in a down trending market, Toys R Us decided to go private and over leveraged its self with debt used in the buyback The problem with leveraged buy outs is they do not work. Toys R Us soon found itself unable to service it debt and eventually went bankrupt.
One may ask what does this have to do with Sanrio and Hello Kitty. Toy R US has to do with Sanrio grand plan to rely big box stores, post closing all of their retail stores. The plan worked for a while, big box retail stores like Target, Best buy had carried Hello Kitty items, that is until the retails stores dropped Sanrio and gave the shelf space to the next big thing. That left Toys R Us as the only reliable seller of Hello Kitty, even though I felt it was a lower quality that what Sanrio stores carried. Now with the sinking of Toys R Us where that leaves Sanrio in the United States? Perhaps Sanrio can admit they made a huge mistake.
We finally get word from Sanrio what going on:
“Sanrio Co., (8136) maker and licenser of Hello Kitty goods, plunged in Tokyo trading after analysts including Sho Kawano at Goldman Sachs Group Inc. cut targets for the company, citing a waning outlook for U.S. sales.”
“Kawano at Goldman lowered the estimate for operating profit in the year ending March by 7 percent, citing costs related to the company’s shift back to merchandise sales from a focus on licensing. Sanrio founder Shintaro Tsuji had previously sought to reduce the reliance on marketing Hello Kitty goods by licensing character rights to companies that make different items based on them.”
As a male fan who shops at Sanrio until it closed, the problem is, what’s licensing to us when there noting to buy and nowhere to shop except Sanrio.com . They closing all their US stores, and I do not think big box stores will take up the slack. There are other things they could had done; they could sell other charters like marketing Chococcat and Batz Maru to the males. If I was the CEO I would work The Hub and get Lauren Faust to reboot Hello Kitty and Friends. It worked for Hasbro, if Guys ie Bronies can like My Little Pony they can like Hello Kitty but unlike Hasbro, Sanrio wants the male market with the female market. Sanrio shot themselves in the foot.