RACHEL MARTIN, HOST:
Toys R Us is liquidating and closing stores after declaring bankruptcy last year. This is bad news for toymakers who still sell a lot of their toys at brick-and-mortar stores. Now, one big toymaker is trying to save Toys R Us. His name is Isaac Larian, and he is the CEO of MGA Entertainment. It's the company behind popular brands like Bratz and Little Tikes toys. Larian is trying to raise a billion dollars to buy Toys R Us, and he even has a crowdfunding campaign online. I talked to him recently about his plan.
Hey, Mr. Larian, thanks for being with us.
ISAAC LARIAN: Thanks, Rachel. Good morning.
MARTIN: There is a reason Toys R Us is going out of business, right? They couldn't get a restructuring plan. Investors didn't want to save it, presumably, because it's not a good investment. Why do you think otherwise?
LARIAN: Rachel, I think what happened with Toys R Us unfortunately is that the private equities bought that company, put a ton of loan on it with interest payments and fees, et cetera. So they didn't have the money to reinvest in the stores and grow it. That is why Toys R Us failed.
MARTIN: All right, so you say it was just mismanaged, but explain why this store is important to you.
LARIAN: Toys R Us is the only toy retailer that you can go in and find all kind of toys in there. Other retailers do not have the room and the space to do that. And as a result, many, many smaller toy companies, including MGA - at one time, we launched our key products at Toys R Us.
MARTIN: So you're hoping to raise a billion dollars.
MARTIN: How much have you raised online so far?
LARIAN: Well, we have already raised over $200 million; $100 million of that is mine. But frankly if the GoFund campaign doesn't go as we expected, we have already investors lined up and financing lined up on the side to be able to do that. Unfortunately, Rachel, we are not going to save all 732 stores. Probably we will save in USA about 150 to 200 stores, and we will build and grow from there. But if Toys R Us goes out of business, the toy business as a whole will change forever.
MARTIN: Let me ask you - many say it already has, and you talk about if you're able to get this money and keep Toys R Us, you will restructure how the company is run. But do you have any other ideas for how to position the company to be successful in the future? I mean, is there something about the branding or the marketing or the stores themselves?
LARIAN: I will make Toys R Us a fun place again.
MARTIN: Like, can you just give me a couple examples?
LARIAN: I can't. I don't want to do that because we are still competing to buy Toys R Us, and I don't want other people to know what we have, what we plan to do.
MARTIN: You're saying something will change about the experience.
LARIAN: Absolutely. And it's not going to be a minor thing. It's going to be a major thing.
MARTIN: Right. And just to clarify, did you say that there is competition?
LARIAN: I hear there are a lot of financial companies, private equity, et cetera, trying to buy it cheap, flip it and make a few extra dollars. Frankly, I think if another private equity or a financial company buys Toys R Us, Toys R Us is not going to last.
MARTIN: You think it needs to be a toy person, and that's you.
LARIAN: Absolutely - needs a crazy person who lives, breathes and eats toys like I do (laughter) to do it.
MARTIN: (Laughter) Isaac Larian is CEO of MGA Entertainment, and he is leading an effort to save Toys R Us. Mr. Larian, thank you so much for your time.
LARIAN: Thank you, Rachel.
(SOUNDBITE OF BEASTIE BOYS SONG, "B FOR MY NAME")
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