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).

How Superstitious Am I?

Only a crazed sports fan would relate to what I am about to write.

How superstitious should I be today? Should I adhere to my time-honored practice of sitting in our den to watch the NY Giants on our 35-inch, 21-year old Mitsubishi console television, a TV that has served me well during the recent playoff drive and previous Super Bowl contests (let’s forget, for now, the debacle in 2001), or should I tempt fate and lay on my bed to watch the Giants take on the Green Bay Packers on our wall-mounted 52-inch LCD, High Definition Sharp Aquos television?

Normally, Gilda prefers I seclude myself in the den, but she’ll be at the gym later. I lean towards going with what’s gotten me, and the Giants, to their present possibility of upsetting the Packers, but I am tempted by Saturday’s viewing of the Saints-49’ers game on the big screen. No doubt about it, everything popped brighter, more vibrantly upstairs. It was indeed sharper on the Sharp.

But if the Giants lose, will I blame myself for switching? Non-sports fans (if they’ve read this far) are no doubt shaking their heads at the absurdity of my thoughts. How infantile can I be?, they are saying. They just don’t understand sports superstitions. Never have. Never will.


From Sports to Politics: You don’t need a TV screen to follow the tussles within the Republican party presidential primary. I’ve got a passing (yes, pun intended) interest in Mitt Romney and Newt Gingrich.

For Gingrich, my link is to his money-bagged buddy, Sheldon Adelson. As I wrote back in May, Adelson was not one of my favorite business contacts. He is transfixed on what he sees as right, and uses his money and influence to advance his causes. Here’s what I wrote eight months ago: http://nosocksneededanymore.blogspot.com/2011/05/my-link-to-newt.html

Memory fails to confirm if I ever met Mitt Romney some 20 years ago when I interviewed several Bain Capital executives about their interest in retail companies, such as Staples. This much I do remember—the three men I did meet all dressed the same. They could have stepped out of a Brooks Brothers catalog with their blue suits, white buttoned down shirts, rep ties, and black oxford shoes. They were clean-shaven with short, dark hair, not one strand out of place.

No, I can’t say Romney was among them. I have met two presidents before they became our nation’s chief executive. Jimmy Carter crossed my path during his 1972 presidential campaign while I was covering an event attended by Rep. John Monaghan of Connecticut. Carter was testy that night, I recall.

Bill Clinton was a guest at an annual shareholders meeting of Wal-Mart about 30 years ago. Sam Walton always liked to have the governors of Arkansas make an appearance and talk about the business-friendly climate in the Razorback state and how Wal-Mart was good for the local economy. A few years later Walton solidified his ties to Clinton by appointing Hillary to Wal-Mart’s board of directors. She served from 1986 to 1992.

The Bain of Our Existence

During my time editing and publishing a business magazine, I often remonstrated against the insidious effect of Wall Street on the retailing industry. The money vultures would swoop in on a merchant, demand representation on the board or some change in corporate strategy intended for short term gain. Often as not, the retailer put up a fight, though they many times paid a greenmail ransom to rid themselves of the unwanted attention.

Bain Capital was one of those companies that pursued chain retailers and restaurants, along with enterprises from other industries. Mitt Romney was a co-founder of Bain Capital. He made a ton of money investing in companies such as Staples, Domino Pizza, Sealy and Brookstone. A foundation of Romney’s presidential run is his business acumen, his experience managing companies, turning some around, creating jobs and helping the Salt Lake City Olympics be successful.

Yet all is not rainbows and hosannas in Mitt’s corporate portfolio. As is often the case, when an investment firm takes over a company with the intent of later selling it, staff is reduced and assets are sold off. Such was the case with Stage Stores, Dade Behring, Ampad and GS Industries. Though Bain sold them for a combined $578 million profit, thousands of workers lost their jobs at those companies, and, once sold, all wound up declaring bankruptcy.

Bottom line: As the campaign for the nomination gears up, expect other Republicans to target the job losses Romney’s company administered. Should he get the nomination, Obama’s attack on Mitt’s labor record will be even more strident.


Belated Wedding Gift: Today marks the 40th anniversary of the publication of the Pentagon Papers. Listening to an NPR report and interview with Daniel Ellsberg, the Pentagon analyst who defied the government by secretly providing redacted texts to the NY Times, I was struck by a couple of points.

First, The Times published the history of our involvement in Vietnam on a Monday, one day after President Richard Nixon gloried in the marriage of his daughter, Tricia, to Edward Cox, at a White House ceremony. Not exactly the belated wedding gift he was anticipating.

Second, perhaps because he was still euphoric over the nuptials, Nixon was not aware of their publication when speaking to an aide Monday morning. The taped conversation (Nixon secretly recorded Oval Office exchanges) revealed Nixon was almost blasé about the exposure of government secrets. But he quickly changed his tune as the day wore on. He said the country couldn’t abide anyone making their own decision about what should or should not be made public.

His reaction to Ellsberg, it was noted, eventually led to his resignation. First he ordered a special unit called the Plumbers to sneak into the office of Ellsberg’s psychiatrist. That was followed by the decision to infiltrate and bug the office of the Democratic National Committee at the Watergate complex. The unraveling of that botched break-in led to his impeachment and subsequent resignation in August 1974.


Short-Sighted: This week is the last time the New York State Regents examinations will be given for French, Spanish and Italian. Regents in Hebrew, German and Latin were cut last year. Eliminating the final proficiency tests will save about $700,000 a year.

In an increasingly global society, in a country where Spanish is rapidly becoming a language required for communication with today’s and tomorrow’s work force, are the savings really worth it? I think not.


55-Plus: Early baby boomers are among the hardest hit of the unemployed. They’re finding it most difficult latching onto a new job. It might not be outright age discrimination they are facing, but it sure smacks of it.

Many of those 55 and older are willing to take lower salaries than they pulled in before they were laid off. Even for those who have kept up their skills to compete with younger workers, prospects are dim.

Some 25 years ago I hired a veteran reporter. Bob was around 65 when he was let go by one of my competitors. I was cautioned against bringing him on. But Bob turned out to be a wonderful hire. He was loyal, working for at least 10 more years, much longer than younger writers generally stayed. Moreover, his experience gave him insight into retailing younger writers would barely have learned before taking wing.

Bob was an example for all within our company that a good attitude, coupled with experience and energy, is at least as important as youthful exuberance when evaluating a prospective employee.