Tuesday, September 19, 2017

Toys "R" Us Bankruptcy Brings Back Memories

News that Toys R” Us filed for bankruptcy protection late Monday stirred a memory of one of my first encounters with Charles Lazarus, the founder and, at the time, chairman, president and chief executive of the chain which is credited with being the first of what became known as the category killer segment of retailing that subsequently included companies such as Best Buy, Staples and Sports Authority.

It was in the conference dining room of Windows on the World, the 106th floor of the North Tower of the original World Trade Center at the tip of Manhattan. Lazarus was a featured presenter at the Modes of Creative Retailing conference organized by Jeff Feiner of Merrill Lynch. For some obscure reason, Jeff relaxed his “no press” rule by allowing me to attend the two-day affair. So it was that during lunch the first day I strategically sat across from Charles Lazarus, an iconic retailer known for strict adherence to organizational discipline (he used to say that if he was blindfolded in any of his stores and walked down any aisle he would find the exact same merchandise on the shelf where he stopped regardless of location. No deviation. That, to Lazarus, was chain store retailing.)

Lazarus, at the time 56-years-old, had founded Toys “R” Us in 1948 as an outgrowth of a juvenile furniture store in Washington, DC. His enthusiasm for his adopted product line was evident in the many pictures that accompanied articles in Fortune, Business Week and Forbes. He’d be photographed riding a tricycle, or surrounded by plush animals, most prominently Geoffrey, the giraffe that became the company’s symbol. 

He rarely, if ever, spoke to the trade press, of which I, as editor of Chain Store Age, was a prominent member. Perhaps he didn’t recognize me across the table. Or maybe he was more concerned with talking up the money managers sitting next to him, who, as I did, clung to his every word. 

Charles Lazarus loved to talk about Toys “R” Us. He tried to share the limelight with his top executives, but, invariably, whenever they would finish their presentations or responses to questions he would not be able to contain himself. He would have to, he’d feel compelled to, add a coda to their comments. 

When we did an extensive report on Toys “R” Us two years later, Lazarus adhered to his no talking to the press rule. Except, when I called him to ask that he sit for a cover shot, he wound up talking for 45 minutes, concluding by insisting he would sit for a photograph only if we agreed to include his three top executives in the  picture. 

On the appointed day we met at a New Jersey store near corporate headquarters. As my son Dan was just shy of his third birthday (Ellie was months away from being born), I decided to do some shopping after the shoot. Toys in hand, I stepped towards the one staffed checkout line. I was third in line. On the other side of the checkout, Lazarus paced back and forth, like a caged tiger. It became obvious he was stifling an explosion aimed at the store manager for failing to open another checkout lane after a third customer entered the line, a transgression made all the more violent by the fact that I, a member of the press, was that third customer. I left the store before the expected confrontation. 

Lazarus was rightly proud of his accomplishments. Toys “R” Us was the biggest toy retailer in the world. And profitable. Very profitable. Only one thing really ticked him off. Too many times interviewers from the consumer and business press wanted to ask him about his wife, Helen Singer–Kaplan, a renowned sex therapist, from whom he was widowed in 1995 after 16 years of marriage. 

As he sat across from me at that 1980 luncheon he revealed that his proudest moment was paying off the bankruptcy debt of Interstate Stores. Interstate had bought Toys “R” Us eight years earlier but had lapsed into bankruptcy, carrying Lazarus’ chain with it. Toys “R” Us emerged from bankruptcy as the surviving enterprise with no obligation to pay off Interstate’s creditors. But Lazarus felt an obligation to. Not many businessmen would.

(For a taste of his enthusiasm, view this short video of Lazarus talking about the making of Toys “R” Us: https://www.youtube.com/watch?v=JG2W0F_rdvA).






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