Without Toys R Us, 30,000 jobs lost and hundreds of retail vacancies

The demise of Toys R Us will have a ripple effect on everything from employees to consumers to landlords.

The closing of the 70-year-old retailer's 740 U.S. stores —  including 12 Toys R Us and four Babies R Us locations on Long Island — will jeopardize the jobs of some 30,000 employees nationwide.

The downfall of the company, which succumbed to heavy debt and changing consumer habits, from online shopping to mobile games, spells the end of an era for generations of children who grew up with its sprawling stores and Geoffrey the giraffe mascot.

And it will force landlords who depended on the chain to scramble for alternatives.

What happens to workers?

CEO David Brandon told employees Wednesday the company's plan is to liquidate all of its U.S. stores, according to an audio recording of the meeting obtained by the Associated Press.

Workers in the U.S. will get paid for the next 60 days if they show up for work, but after that all benefits and pay will be cut, he said in the recording. Some workers will be asked to stay longer to help with the liquidation.

In his address, Brandon took shots at shoppers and vendors who cut back on their support for the chain in recent months.

"I believe that all of them will live to regret what is happening to our company," he said.

The chain lost ground to discounters like Target and Walmart, and then to Amazon, as even nostalgic parents sought deals elsewhere. GlobalData Retail estimates that nearly 14 percent of toy sales were made online in 2016, more than double the level five years ago. But analysts estimate Toys R Us still sells about 20 percent of the toys bought in the United States.

What happens to the real estate?

Given the chain's issues, the closings aren't a shock to landlords, said Katy Welsh, a senior vice president at the southern Florida division of the commercial real estate brokerage firm Colliers International.

Welsh says she's been working with a number of companies like Glowzone, an entertainment park, and Lucky Markets, which offers beer tastings in its stores, which would be interested in taking some of the spaces nationwide.

"You have to look at this as an opportunity to reposition that store," she said.

Kimco Realty Corp., a New Hyde Park-based real estate investment trust and one of the largest, publicly-traded landlords of shopping centers in the country, said the impact of Toys R Us’ bankruptcy would be minimal on its business.

Toys R Us locations "represent only 1 percent of our total annual base rents,” the company said Thursday in a statement.

The company has 23 leases with Toys R Us — including two on Long Island, in Commack and Bayshore. It said the spaces could potentially yield higher rental rates with new tenants than they do now. 

The freed up space “should only help to improve our tenant mix and drive future” net operating income higher, Kimco said. — with Victor Ocasio

— with Victor Ocasio